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I personally think an a large size apple tablet could be very good for the ebook market. The ipod touch is a great little device, but I found its cramped screen a little annoying for reading.
That being said, I think 10" is too large to be super general purpose. A 5-7" screen is likely to be much more portable. And of course any back lit LCD is not necessarily going to be ideal for reading for hours at a time.
BTW, if you really want the ability to do folders, well, there are current devices that support them... the Jetbook is one example.
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Bill
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