My take is that two of the modes will be functionally equivalent to those on the OLPC XO-1: (i) a non-backlit, high resolution B&W mode and (ii) a backlit colour mode. Both of these should have fast "refresh" rates that will allow animation. The third e-paper mode sounds like it is a power-saving version of (i), i.e. it will have the same characteristics as the B&W mode, except that it will involve some form of power management that precludes fast refreshes but will yield extended battery life.
I have an XO and an iLiad, and I'm hoping that the claims that the new screen is "paper white" are true. The XO's screen is very sharp, but the contrast is quite low, making it harder to read in dim settings than the iLiad.
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