This is interesting news indeed...sadly Vodafone is even higher up on my hate-list than t-mobile...
The format will most likely be ePub, that seems to be the dominant format in Germany at the moment. I wonder which platform they will be going with though, since there is no real german ebook market yet. Libri seems a likely choice, they are pushing the Sony Reader and might be willing to expand to the new device.
More interesting might be who is going to provide the hardware. I'm placing my bets on Netronix, but who knows...it might be some so-far unknown startup...