+1 on dictionary, highlight a word and hit enter to look the word up would be sweet.
I don't use a dictionary while reading since it would be too distracting, you can generally guess the meaning by the context, but with a digital device it should be easy and fast enough to look it up without losing concentration. It would certainly improve things when I've assumed a meaning before reading another 100 pages and realising the story is all wrong with that assumption
Now I mark a page on the Reader with the intention of getting the dictionary definition later, but I usually don't get around to it.