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My family and I (me with iphone, wife and kids with their own iPod Touches) -- LOVE reading on them. 8gig is more than adequate for ebooks. It's not like you have to have your entire library on your iTouch to begin with -- but you probably could fit several thousands of ebooks in 8gig of space.
The device is small which is both good and bad. It's good that you can carry it around with you. It's bad in that, well, it's small. Thing is, you can set the font to any size you want. I actually have mine set to larger than most any hardback book I get from the library. The larger the font, the less shows on the screen, of course. I have mine set so that the tap of my thumb turns the page. I can hold the device in one hand and tap tap tap with my thumb. No big deal.
You'll have to give it a try yourself to judge whether it's comfortable on your eyes. Everyone I know in real life has no problem with it. A few folks I know on the web says it strains their eyes. I don't know if they've tried setting the font larger or adjusting the brightness (which I do).
I like reading on my iPhone so much that I stopped even wanting a kindle. I'm getting an iPad but not for reading books -- at least not for the main reason of.
So consider me a "yes" vote
Lee
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