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It's a touch screen with the stylus. Yes, you can write on it while you are reading.
I use the wifi frequently, that's my main way to transfer books back and forth between it and my PC. I also used the wifi for updates, etc. All of that can be done without the wireless as well, though. It's mostly a convenience/preference thing.
The battery life of the "older" iLiads is around 12 hours, the current generation (the v2 and the Book Edition) get around 15 hours. Those times are assuming you're just reading with it. Using the stylus as well as using memory cards take more power, so results vary depending on your usage.
The current firmware is 2.12 (2.12.1 for the Book Edition). iRex has said that they do not plan on any new features, but they have opened sourced most of the code and there are developers on here working on new applications, improvements, etc.
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