I use the iLiad quite a lot for reading books and reading/correcting scientific papers, and it does the job quite perfectly. The thing about the eInk is that it is *very* easy on the eyes. I've read books on back-lit devices and I sit in front of LCD screens most of the day, but nothing can compare to the eInk.
The stylus does feel somewhat different than a pen on paper, but for me I'm actually more used to the iLiad now than normal paper. :-) Also it has some very nice features, like the gestures/quick erase and I've been thinking about a SVG drawing program that could use figure recognition, making it very easy to draw flow charts and just design scribbles. And of course, you have all the wonders of having tons of stuff with you. :-)
The iLiad also uses a wacom digitizer, so any wacom stylus will do. The iLiad stylus is quite thin and short, so I guess a proper stylus would make the device brilliant for writing, once you get used to the gesture.