Here is CNET's take on the KPW:
About that light. When I first saw it in action, my immediate impression was that Amazon was using backlit technology even though I knew it had to be front-lit. That's because the light really does splay across the screen very uniformly. But indeed this is front lighting and Amazon's engineers placed the 4 tiny LEDs at the bottom of the display rather than the top as Barnes & Noble has done with its Nook Simple Touch with GlowLight, which earned an Editors' Choice from CNET. (Kobo has also placed the LEDs at the bottom of the display in its upcoming Kobo Glo).
Because the bezel on the Kindle Paperwhite is so thin, you can't really see the LEDs when you pick up the device (that's why my first impression was that it was backlit technology). When you hold the Nook Simple Touch with GlowLight in front of you, you can't see the LEDs either. However, if you lay down the two devices side by side on a flat surface, the Nook's LEDs and lighting scheme becomes more apparent and visible. In short, while the Nook GlowLight is still quite good, the Kindle Paperwhite's is even better -- the lighting just looks more smooth and uniform across the screen.
Back in 2009, Amazon acquired Touchco, a multitouch hardware company, and apparently tasked it with developing a capacitive touch screen for its e-ink e-readers. That investment has finally born fruit over three years later.
My initial impression is that the capacitive touch on the Paperwhite is superior to the IR touch found on competing devices, but it's not necessarily a night-and-day performance boost. One of the reasons for that is that the speed and responsiveness of the device is limited by the processor and the sluggish nature of e-ink in general. The higher resolution display is also pushing more pixels, so page turns and overall responsiveness only seemed slightly faster.
Look closely and you'll see that by moving to a capacitive touch-screen, Amazon's designers were able to shave off some thickness of the bezel (the IR transmitters that measure your finger taps on the screen were built into the bezel on the Touch), making the Paperwhite slightly thinner than the Touch. Amazon says the bezel is 77 percent shorter (that helps reduce the small shadow the raised bezel casts).
In other words it is better *and* in-house tech (like the frontlight) so they don't pay royalties. Kinda like their DRM and ebook format. If nothing else, Amazon is consistent: in the build vs buy debate they prefer to build.