I think some things Amazon has introduced with their Kindle device are very interesting, but at $399 IMHO I think it's over-priced by at least $270, maybe $300-350. The only thing I can figure is that since they're not charging you for network access and bandwidth they need to get a big chunk of money from you at the start. That price is just way too high for me.
On the positive side, I am impressed by their display. It does look like paper, which, for me, is a nice touch. If it's not already available, this seems like a great idea for an iPhone application.