First, it's damn small. I have it in a case, so it's slightly bulkier, but whenever I take the case off, I'm always amazed at how thin and light it is. That's awesome. The screen is exactly as paper-like as you've heard. When it arrived, it had a plastic film with a diagram of how to plug it in and turn it on. When I took the film off, the diagram stayed. It was being displayed by the screen, and completely looked like it was printed on the plastic. The screen is almost completely non-reflective. This is awesome when reading outside. Or really any time.
For those of us who sometimes ride on crowded trains or busses and have to hang on with one hand, reading can be tricky. Particularly when trying to wrestle a 1000 page Stephen King hardcover into submission. The Kindle has the "next page" button on either side, under your thumb, so one handed reading isn't a problem. Of course, it's also possible to bump it accidentally, and the "previous page" button is only on the left, so that can be kind of a pain.
Of course, the elephant in the room is that you basically have to start buying your books from Amazon, and the prices aren't a ton cheaper than the print versions. Personally, I have no problem with that, because I've never operated under the illusion that when I buy a book/movie/game that I'm paying for the physical component, but rather the creative effort that produced the content. Still, a lot of people feel like digital copies of things should be cheaper than physical copies. For those people, the Kindle isn't going to make you happy. However, I certainly don't mind having fewer books to sit on shelves. I can definitely see a future Chuck who has one bookshelf filled with elaborate leather-bound collector's editions of a select few books that are worth it (I'm hoping for a fully illuminated and illustrated version of Lord of the Rings), and everything else in electronic form.
Yet for those who crave cheap books, or those who want to convert their already-purchased physical books to electronic format, all isn't lost. There are hundreds of completely free public domain works both on Amazon and at various other websites that are totally legit. I've got the complete Sherlock Holmes waiting to be read. The other option is to locate "alternative download sites" that can provide copies of the books that you already own. You've paid for them, so as long as you maintain possession of them, I feel you're entitled to an electronic copy. The Kindle also lets you download the first ~30 pages of any book they sell as a trial, which is a pretty good way to find new books. Amazon also gives away free current books from time to time. Long story short is that through various means, I have 43 books on my Kindle, of which I've paid money for two.
Since I have that many books, including all the books from the series I'm currently reading, I haven't had to make use of one of the major features, which is the free wireless. You can shop and buy books directly from the Kindle, and they automatically download. You can also shop on a PC, and then have any books you buy delivered directly to your Kindle. It's very slick, and could be handy if you somehow finish your last unread book on the thing.
So is it worth the $300 price? I think of it like the iPod. You didn't buy an iPod to save money, you bought it for the convenience of being able to carry and listen to music wherever, and do it more conveniently than you could with a CD player. This serves the same purpose. It's smaller than most books, and easier to use in certain situations. Like with mp3s, you lose the nice bits of physical media. There's no cover art, no big shelf of books/music to impress guests with, and it's certainly not as romantic to curl up with the Kindle in front of a fire with a cup of tea to read. But it's sure as hell easier to travel with, which is definitely something I'm looking for right now.
As a lifetime bibliophile, it kind of pains me to write this. In my own small way, I'm contributing to the inevitable demise of the physically printed word, and that's certainly very sad. But in a way, the transition to digital media might actually bring the status of a physical book back to where it was in the days before Gutenberg. Back then, a book was an almost revered object, something rare, to be treasured. Now, books are basically disposeable, sometimes more useful for propping up a broken table than for their intended purpose. Would it be such a bad thing to keep the written word accessible while returning the physical book to it's past glory? Not in my book.