Well, since there is no perfect ereader at the moment, its a question of compromise. I throw the Touch in a pocket and forget about it...until its needed. Perfect portability. Try to do that with an Iliad or Kindle. As for the screen, yes Eink is better, but the Touch is more than adequate for an hour or two of reading on the go.
Here is a link to a youtube video that shows how readable textonscreen is for the Ipod:
http://www.youtube.com/watch?v=QWd8J8C3Gaw