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Other comments:
@maggotb0y: Sure, paper books can be gift items, but so can e-books. That would come in the form of gift cards, like iTunes gift cards or Starbucks gift cards, that allow the user to get what they want, or what you preload onto it. (We discussed this on another forum a while back, the idea of preloading an e-book on a card.)
@radleyp: Yes, the devices are expensive, and yes, prices should come down. But it is important that e-books are readable on many other devices, many of which people already own... like PDAs, iPods, smartphones, blackberries, laptops, UMPCs, etc. There should be as much effort to get people to try e-books on hardware they already use, so they don't have to feel left out by not having a $400 piece of hardware. (I personally think Amazon's greatest mistake in e-book promotion was locking their books into Kindle. I hope they will change that, especially if Kindle numbers do not turn out to be as high as they'd like.)
@dennis: Saving paper may be a fringe benefit... but it's a pretty big bunch of fringe, and worth saving. Add magazines to books and newspapers, and you're talking about a lot of... wiping.
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