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Any device that has a high ease-of-use with ebooks is going to be able to handle pda-functions. The Iliad is a good example of this. It has, by far, the best ease-of-use system. It can natively read pdfs, text files, html, xtml, etc. Other devices coming out have to convert such documents and require you to have a computer to do so (as I understand it). The Iliad can stand alone, and with wifi you can get a new ebook when you are already out on the go or in the middle of something; or potentially a friend could share a (free) ebook with you without requiring a computer (which must have the right software) intermediary.
Adding wifi doesn't cost much (20 bucks or so, at most 30-40, american). As for pda-functions, if the device is running linux you can get a lot of those for free through open source software, and more would be made for the device (again, for free).
The Iliad is probably expensive not because of the xscale processor or wifi, but rather because it is using a new screen technology, using it a bit differently than Sony or Hanlin, has a touch screen interface akin an electronic drawing pad, and it is a first model of this new technology. Don't underestimate how nice it can be to take notes or mark down special passages in a book either; especially if you aren't really marking the book up in anything close to a permanent way; the interface is a very nice touch.
Hmm, I do see that some people wouldn't care about anything else. However, I think they are the minority of the population in general. That doesn't prevent them from potentially being in the majority of the people who buy the first run of more limited devices. In fact, it makes it more likely they'll be in the majority of that smaller group. In any case, I think the first really popular ebook reading device will likely do a number of other things, even if that isn't its focus. It will probably have eink technology (which makes ebook readers very practical). It will do these many things merely because there is no real reason for it not to, so devices that only do one thing probably just won't sell as well. That's my prediction anyhow (and I expect balloons and such if I called it).
-Drachasor
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