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I think there is plenty of room for both lcd and e-ink display devices, and that they serve different markets. Heck, I still like to read on paper as well.
At this stage of the game I don't see ebook capability on the iPhone stealing market from Sony or Amazon, mostly because there isn't much market there to steal and still a lot of room to grow. If anything, it has the potential to grow the market. I doubt Sony or Amazon have sold a million of their devices (though I'd love to be proven wrong), but the iPhones and the iPod Touch are out there in big numbers. Because of the iPhone's SDK, there is at least the potential of supporting multiple file formats in a way that the Sony and, even more so, the Kindle don't.
I would agree that the last thing we need is another new app and format; we need to see MobiPocket and eReader. I doubt LIT will happen due to its dependence on Microsoft components and the near abandon-ware nature of the software. Something similar to uBook would be quite welcome.
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