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I may be wrong but I suspect the problem is with battery life. eBook Readers really need a long battery life and I think the technology to provide colour needs the screen to be backlit - which sucks power like a drain.
Have you thought of looking at the Archos range to see whether they have something that might answer your needs? I also think that the John Lewis Partnership in the UK were offering colour machines (but without the long battery life of B&W eReaders) at about £75 ($100?).
Cheers,
Mike
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