This was prompted by some recent posts by my fried Wulf about ebooks. I've read a few ebooks on my Palms and my phone. These have all come from free sources such as Feedbooks. We still buy books, but mostly for Xmas and birthdays. I have enough to keep me going for a while as I don't find much time for reading apart from in bed and then I seem to be catching up on the interesting bits of that week's Saturday Guardian. I still keep a few books on my phone to fill the time when I'm hanging around somewhere with nothing to do. I've been reading one of Cory Docktorow's books for months now. A colleague has his Windows phone or iPhone on his desk with a book on screen to read whilst waiting for code to compile.
I find my phone adequate for reading novels. There's no need for fancy navigation, search and other features. I have seen some dedicated ereaders, such as the Sony devices. The screens look readable, but I don't like single-purpose devices. Having an all-in-one device is more convenient, but always means some compromises. I've not seen a Kindle.
I would only pay for ebooks if they offer good value. I think they should cost much less than a paper book for various reasons. They have minimal production costs, you lose some convenience in being able to share them with friends, especially if DRM is used and they have no resale value. Similar criteria apply to music, but I have bought a few download albums that were reasonably priced and DRM-free. Both have immediacy in that you can order them and not have to wait for delivery. I can ereaders as being more useful for ephemeral media like newspapers and magazines, but publishers have to find new ways to present their material and perhaps still force advertising on the reader.
The iPad has been mentioned as a medium for reading books. It may be usable as such, but seems too big to carry around with you. I'd be happy just to have a phone with a larger screen as long as it still fits in my pocket. I can sort of see a market for the iPad (crap name) as a media consuming device for the non-technical. Some people don't want to worry about operating systems and files. They just want to watch video, listen to music or surf the web. No doubt people will find other uses for it, e.g. as a control surface in audio/video work.
Something I've heard a few times is that Apple design their devices to be easy to use, but Microsoft try to cram in maximum features and worry about the controls later. My Windows phone is certainly clunky to use. I much prefer the Palm UI, but I don't even have a touch screen on this phone. I'm unlikely to change phones again for a while, so I'll get by with this one, despite the cracked screen. I have other demands on my money for a while.