I have a Sony Reader which is basically the same thing. Here's my take.
As for the e-ink technology, the display, when it first came out, the books only really looked great in direct sunlight. They were completely readable indoors as well, but it wasn't even close to as good as a book.
The newer ones have much better displays, the white part is whiter, whereas before, it was more gray, so it was black on gray instead of black on white. The Sony ones have a backlight now, IDK about the kindle.
Pros and cons for the kindle:
pro: it has a qwerty keyboard, the sony doesnt.
pro: it has whispernet, which is cell-tower based access to wikipedia and amazon bookstore, and it's free forever. Access wikipedia anywhere there is a cell signal and you don't have to pay for it. Fantastic.
huge con: they can remotely delete books from your Kindle, and they've done so before. that's insane. Also DRM can be annoying.
one HUGE PRO for the sony reader, and i don't know and probably will never know if it applies to the kindle: I DROPPED IT IN THE OCEAN AND SCRAPED THE SCREEN ACROSS AN OYSTER BED AND IT STILL WORKS. Completely submerged in saltwater. I disassembled it and bathed in alcohol when I got it home, then I had to wait a couple months for the battery to completely die on its own before it started working again, but hey, i find that awesome.
Overall, it depends on how many books you read to know whether it's a justifiable purchase, if you read more than 3 or 4 a year, it pretty much pays for itself. Also it's handy to have 1000+ books in something that weighs less than one.
They still aren't quite as nice as regular books though, IMO. Also, batteries will never die in a paperback.