Readability was my major concern before getting an iliad. For documents that are letter or A4 sized, single column (as books tend to be) I prefer landscape with continuous view. That way with the standard irex ipdf you get about 80% of the original size. If you install the fullscreen version of the ipdf then you get about 90% of the original size.
For multi-column journal articles I used to rotate to landscape view and then use the stylus to move the page around to go up and down the columns. Once I got used to it this worked well. Recently, however, wpd has created a patch that follows the text so I can now zoom in to make the text the same size as the paper version and just use the flip bar to move down the columns of text and then up to the next one. This is an awesome feature. (And people on here are in the process of combining the fullscreen and column-wise patches along with other goodies into one.)
[Edited to fix the URL]
Here's a few photos of
a journal article
The first shot shows what it looks like in portrait view. This is about 56% of the paper copy. I can read this, but I wouldn't want to read for more than an hour or so at this scale. If you print this page to A5 (e.g. two pages per view) you get about the same size, but in my experience the quality of the paper printout is not as good as seen on the iliad.
The second shows landscape view. This is about 80% of the original paper copy.
The third shot is portrait again using the column-wise viewer. You can see the current block of text with the navigation box around it. This is the same size as the paper copy.
[Apologies for the lousy photography]