Is Kindle the future of reading?
The physical format is, because electronic paper is totally sweet and the extra long battery life is great too. But their system is horribly restricted and locked-down and broken in a few key ways. It's way worse than Apple and iTunes and the iTunes store where you can only play iTunes Store songs in iTunes or your iPod. There's some sort of for-pay conversion service and some other free conversion service where you send them a document and it arrives in Kindle format (something called .AZW that is Amazon's own thing) and you can also load plain text files onto it for reading.
If you want to read a .PDF, which is basically all I would want to do with it, then you are SOL. Amazon, in their mad quest to be not a hardware manufacturer (teeny tiny margins) but a service provider (nice big fat margins) and a publisher (potentially nice big fat margins, but the business accounting practices in publishing are so messed up there is no way to know), has decided that the device isn't really yours. It's kind of yours and it's kind of theirs, and if you want to load crap onto it, then it can either be a .TXT file with no formatting whatsoever, or you have to go through them. Basically, it's a good idea that, much like your recent troubles with Windows "Genuine Advantage", contains flaws that amount to Amazon giving you the finger and will probably piss you off too much for you to be able to use it for any length of time (much like Windows Genuine Advantage did).
So you don't want one until someone makes one that won't piss you off constantly. Which could be Amazon if they drop their pretensions of still controlling the device after you bought it, or it could be someone else. If Kindle is the future in all regards, then you and I will probably end up sticking with the past.
 Pedants please note that while it is technically possible for non-iTunes things to usefully play .AAC (or whatever they are) files, basically nothing does.
 This was all garnered from web research that ended up finding the useful page: http://gadgets.boingboing.net/2007/11/
 This "your thing is not really yours" is sometimes called "Digital Rights Management" (DRM) or even "Trusted Computing". In the long run it's a broken idea (Prof. Ed Felten has a lot to say about this kind of thing), but in the short term it's seductively appealing to large media companies that don't want to change any of their practices even when faced with radical technological upheaval. Some dystopic fiction and other stuff has been written about this, most notably attempting to get people to call it "Treacherous Computing". Which it kind of is. Treacherous, I mean.
 People who prefer physical books are referred to in librarian circles (where the debate between new tech and old books is apparently this massive constant fight) as "booksniffers". In other circles, people who want physical books are called "pervy for paper". As for me, I think of it as simply wanting to have the new book technology be strictly better than the old book technology instead of this weird "it's digital and sexy, but it's also no longer yours" thing that media companies seem obsessed with.