Quite a few people I know (including my Dad) are interested in reading ebooks and are searching for a suitable device.
I googled a few reviews on PC World, CNet, and Top Ten Reviews and it appears that overall, the Amazon Kindle, Barnes and Nobles' Nook and Sony are rated as the top devices across most sites. The IPad joins this list now, but it will be interesting to see to what extent it can compete with the Kindle as a pure ebook reader; the IPad of course, is designed to do more than just read books.
You can always read ebooks on your mobile device, PDA or DAP, but in most cases the ebook support is not properly implemented.
I personally think that we don't yet have a perfect ebook reader in the market and I would pitch that people should wait till we see the following features implemented:
1) A true open-source ebook software (Epub is a start) that makes it easy to standardise and convert. Sort of an MP3 equivalent in the ebook world
2) A device which is NOT linked to one proprietary book store like Amazon or Apple's IBooks
3) A device using E Ink, which both conserves battery power, and makes reading easier on the eyes
4) A useable method to convert existing physical books into ebooks. Maybe a built in scanner? (I have to thank my dad for this suggestion!)
5) A price tag of not more than Rs. 20,000 ie. in the range of netbooks today.
If you feel more features are needed, do add to the list. Meanwhile, I think that if you want to read ebooks, don't invest in anything, read them on your laptop or netbook! We are still waiting for the best ebook reader...