I always used to say my dream device would be an oversized iPod Touch, but if I had such a device I would not use it as my music player anyway because it would not fit in my coat pocket while I am walking in snow, which I do often as a public transit user in Canada
So for me, there will always need to be two devices in my bag, the smaller music player and the book-sized book-reading device. Therefore my current iPod-sized iPod Touch and book-sized Sony do everything I need and one device could not replace the other.
IF we ever got to the point of colour ebook readers with decent battery life AND widely available DRM-free magazine subscriptions of popular magazines (not just the sci-fi/mystery at Fictionwise) then I would reconsider my current setup.