I would have said Nook Simple Touch a few months ago. But I've experienced very frustrating issues with Barns & Noble over the last 5 months. I still love that device though. However, as a result, I just switched to Kindle and first purchased a Kindle Touch for $40 through Craig's List. I liked it so much that I switched to the Paperwhite and love the addition of the frontlit screen.
So my vote is to either look for a used Kindle Touch on CL or eBay. Or buy a refurbished Paperwhite from Amazon for $104. It would be "new to you," in that it should arrive with no scratches or blemishes of any kind. The only difference is that it might be in a different box than the "new" one. Who cares. It carries the same warranty and also qualifies to add the extended warranty in the first 30 days.
It's an absolutely phenomenal device and I've been e-reading for 4 years. I'll never go back.
By the way, the Kindle Touch and Kindle Paperwhite both have basically the same touch interface. the addition of the frontlit screen is the major difference between the two. You can also buy a refurbished Kindle Touch from Amazon for $89 as well. For the $15 difference, if you're inclined toward the Kindle, I'd definitely go with the Paperwhite.
Here are links:
Paperwhite
http://www.amazon.com/Certified-Refu...dle+paperwhite
Touch
http://www.amazon.com/sale-deals-Kin...d+kindle+touch
But that's just my two cents.
Here's a link that you can get lots of free and cheap Kindle books, if you decide to go that route. It gets updated everyday and the prices are typically only good for the day.
www.pixelofink.com
Hope this is helpful.