Have to say my kids prefer print - large text, colour and they can handle them roughly with no risk.
I've got an iPad - and to be honest - it's simply too much of a distraction for them, they just want to play the games on it or play around with touch screen features. I'm not sure how much they'd be into an eInk reader either as they are still too young to not want pictures.
For a perfect kids device I'd probably hang on until large colour eInk readers come out.
Now all the above aside there are some amazing learning apps (for the iPad at least) that they love to play and are educational but they aren't really story time material if you know what I mean.
Cheers
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