I have a Kindle (the original model) and I love it.
The price is steep, but it's worth it. This is a game-changer. Like others in this thread have said, I can't go back to reading normal books anymore. I adore this device like nothing else and use it every single day.
Amazon is always offering new free books and you can get public domain classics (Dracula, Shakespeare, Sherlock Holmes, Jane Austen, etc.) for free legally from various sites. I like feedbooks.com myself. That alone really adds to the value of the device.
I don't want to turn this into some Amazon vs. Sony fanboy sermon, so I'll just briefly tell you why I chose the Kindle over Sony:
- Whispernet: Wirelessly download samples (free), books, and magazine/newspaper subscriptions to your Kindle. You do not even need to rely on a computer, USB cords, etc. It's convenient and just plain awesome. It's like having a bookstore/library in the palm of your hands. 3 a.m. and you want to read a new book? No problem. It's yours within a minute.
- I trust Amazon over Sony: Sony has a history of not supporting formats (Beta, UMD, etc.). Amazon has proven that it can last over the long haul. Until DRM goes away, I feel safer having my purchases stored at Amazon.
BTW, reading on a PC, iPod, phone, etc. is not the same thing. The e-ink display on the Kindle (and on Sony's device) is amazing. It feels as comfortable to the eyes as reading a real book. A computer or phone do not offer the same experience.
Of course, at this point, you should obviously wait for info on the Kindle 2 before you make any decisions about which model you want. Pics are already out there (see earlier in the thread) and there'll be a press conference on Monday. It's coming soon.
In a nutshell, the Kindle is absolutely worth it.