I saw this in Gizmodo today -- The
Wikireader. It is a small dedicated reader for wikipedia made by the company Openmoko. The wikipedia articles are stored on a microSD and updates, if any, can be downloaded and copied over that same microSD. The device looks a bit small (see attached pic) but it does have a touchscreen and on-screen keyboard. The Wikireader costs $99.
I don't think people will line up to get one of these BUT if Openmoko made it to read standard eBook files (ebook, mobireader, even plain text) then it may well be the low-cost reader everyone is waiting for.