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I have used a Kindle2, iphone, and iPad for reading. I am almost exclusively using the iPad now.
The kindle is great for reading, being light and crisp, long battery life and a good, paperback size.
The iphone is great because I always have it, and the retina display is excellent. I have read whole books on it without issue.
The iPad wins for me because of its larger screen. I don't find the text blurry at all, and I use the kindle app so I can keep all the books I previously bought. I also use the nook app to share books with my wife - she was able to lend me Water for Elephants (recommended, by the way) so we could both read it for one price and discuss it after seeing the movie. The iPad, and iPhone, can also use several other reading apps, like kobo, stanza, etc. This provides unequaled access to books from different vendors.
The iPad is quite a bit heavier than a kindle or nook, so that could be an issue for you.
Good luck in your search!
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