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Three factors make the iLiad stand out from the competition, in my mind: the larger screen, pen input, and the (relatively) open development environment. No other e ink device has any of these so far. I think the price is still a bit high for the market, though. A lot of that is the cost of the actual hardware (the e ink screen, the Wacom tablet, the wireless interface, and the multiple types of external memory). Hopefully the price of the e ink screen will drop. Only a hardware redesign is likely to help the other issues (if they can find a design that's more economical to build, for example). It doesn't look to me like the B2B model is working out very well, and now they're in a much more competitive market.
They need another big market differentiator to increase the value at the current cost. Full on-board handwriting recognition might do it, and wouldn't require a hardware redesign. The UI also needs an upgrade. And if they do a hardware redesign, they absolutely have to address the "sleep" mode (whatever you want to call it).
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