The way it works on the iLiad is that you tap a "lookup" button, then tap the word that you want to look up the meaning of. I actually find it less convenient than the CyBook's lookup method because it means switching to and from the stylus, which is a little inconvenient.
I don't think "bubbles" would work too well. A good dictionary (I use the Chambers Unabridged dictionary, which is very good indeed) can have definitions which are pretty long, and really wouldn't fit in a "bubble". The fact that the dictionary "replaces" the book on the screen is very convenient, because it means that lookup is "recursive" - you can look up the meaning of words while you're reading the dictionary definition.
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