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Hardware wise, I'd like an SD card slot, and a user-replaceable battery. I sure wouldn't mind a touchscreen with real handwriting recognition to allow simpler markup with a stylus. If it's good enough, you could drop the keyboard, which would save some real estate. But really it's the SD card slot and battery I'd like most.
Software wise I'd like to be able to search across pdfs and to be able to highlight and annotate pdfs and I'd like to have tags or folders and I'd like it to be able to read any format--even DRMed formats and I'd like Amazon to drop its proprietary format and sell its e-books to anyone.... But I would be happy with the pdf and folders improvements.
I guess that pretty much covers it.
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