I'm pretty much in the same boat, trying to find the perfect device for reading journal articles and taking notes.
If you're in North America (or know someone who'd be willing to order for you), one option might be the
OLPC XO. It appears to strike a happy medium between the Iliad and a full-blown tablet PC. The price, even with the give-one-get-one offer, is certainly cheaper than either the Iliad or the X61t too.
Hopefully I'll get mine before the end of the month, so that I can test it out and see how it performs in the 200 dpi B&W mode.