I have a Kindle 1 and a Kindle DX. I really like the bigger screen, so the Kindle DX has become my primary reader. The smaller sized screens don't handle a lot of types of texts very well (e.g. poetry, textbook material, etc.). However, I still prefer the larger DX screen for even novel type books because of fewer page turns.
So then, why not a 12" screen. I have a feeling I'd probably find it too big, but of course I'd have to see one to make that judgement definitively. Personally, I want the smallest sized screen that will comfortably display an 8 /12 x 11 sized page and the Kindle DX hits that sweet spot for me. (This is not to imply that I believe the Kindle DX is perfect - far from it.)
With all of that said, I still prefer the Kindle 1 for travelling and would probably prefer the thinner Kindle 2 for travelling if I had one. When travelling and reading novels, I'd want the smaller screen.
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