I am upgrading my iPod Touch to the 2.0 software when it becomes available, because my favorite eBook reader, eReader is available for the iPod Touch. I am thinking that the screen on the Touch is going to be awesome for reading books, better than my Pocket PCs, which I have been using. Besides, the $10 upgrade is much cheaper than a Kindle, which I had been contemplating.
The iPod Touch would be a perfect PDA except that you have to use the on-screen keyboard for text entry which is not nearly as fast as a physical keyboard or a stylus, IMHO.
Notes From The Cave 