I use a denshi jisho (electronic dictionary) with handwriting recognition, which is suitable even for beginners. While it may be cumbersome to use a separate device to look up words, it beats the paper dictionary. Not sure how it compares to a half baked solution on the ereader itself as that's not possible with my device anyway.
On the plus this dictionary works just as well with paper books...
Unfortunately the jisho only uses proprietary dictionary formats... otherwise I could use the jisho itself as an ereader, as it has an SD card slot (for extra dictionaries) and a somewhat suitable LCD display