The next Kindle really needs a touch screen (as well as improved speed and contrast). I find using the dictionary, highlighting, selecting links, etc. to be frustrating to the point that I generally ignore these features.
Everyone who picks up my Kindle who hasn't seen one before tries touching things on the screen.
If they can add a touch screen without damaging the readability then they will be onto a winner.
If they don't add touch I can't see mainstream users buying a Kindle over a tablet even though I personally find e-ink far superior to LCD for reading.
And does the Kindle need to be thinner? It's already incredibly thin, and I don't hear anybody complaining about its thickness. Any thinner and I think it might stray into 'flimsy' territory.