I would have loved an ebook reader when I was a kid, but thinking of my niece (13) and nephew (6), I don't think they'd be crazy about it. They like to play with their dad's Xoom tablet too much to be pleased with an eink screen, I think. If they were older they'd appreciate it for novels but not right now.
As far as books, my sister takes them to the library (not so much my niece any more but definitely still my nephew). For a 6-year-old, going the library and choosing whatever books he wants from the shelf is a treat and an experience I feel he would miss out on if his mom could just download all his books from the computer. He also learns about taking care of other people's property, and that he has to return the books on time if he wants to get more.
Besides all this, buying a kid an expensive electronic device just seems like a bad idea... but I suppose it depends on the kid.
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