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I should mention that my 3 year old regularly plays games on my 1st gen iPod Touch, so the warning about small children and electronics is not necessarily true.
I've carried myTouch loose in my purse since I got it a few years ago and despite the abuse, it's still in excellent condition. I attribute this to having it in a good quality hard case with a screen protector. So, if you get a Touch, get a good case (mine has a rubberized backing) and screen protector.
Check the price on refurb Touches on the Apple website. I can't remember at the moment what the cost is, but they do give a full 1 year warranty, new battery, new outer case and box.
One benefit of the Touch is that you can do more than just read. The downside is that, with the small screen, you will be scrolling or turning pages more often (which might be a drag on a really long book).
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