I've owned a Kindle (2nd generation), for about six months now, and really like it. Not every book I want to read is available on Kindle, so I still get some from bookstores, but now I prefer getting the Kindle version.
I love how many books it holds, making it a very portable library. The screen is great, nice and easy to read. The purchase discount on books varies, and I think it is great how many books are offered for free. Check out the Kindle bestsellers list - many of those books, even fairly current ones, are free! When I see one that looks interesting, I grab it... so far the best freebie has been Finder's Paranoia, which I enjoyed. I also use the sample feature, where you can download the first chapter or so of the book, for free.
There are some obvious downsides - unlike a book, dropping it or getting it wet could ruin it. But I'm careful when I take it around. There isn't really a way to share a book with somebody else, say I finish reading a book and want to loan it out. Can't do that unless I loan out the whole Kindle!