To be honest, I really want an iPad, but that's a different conversation.
My initial objections to Amazon's toy was the original high price, the proprietary file format it required, the minimal support for other types of documents, and the limited availability of content. Each iteration of the Kindle brought better support for other formats and and third parties have developed methods to add or convert files from most of the major document formats for use on the Kindle.
I've also noticed expanded content available from Amazon. The hardcover version of Christopher Coker's The Warrior Ethos: Military Culture and the War on Terror is $112 from Amazon, with the paperback coming in at a still hefty $41. The Kindle version is available for $33.56. This is a far cry from Amazon's requirement that e-books sell for $9.99, but still a significant savings over the cover price, and using the WiFi or 3G versions of the Kindle gives you instant access to the book, which you can also use on your PC, Mac, iPhone, Blackberry, or other devices. While working on my last project, I came very close to purchasing the Kindle version for use on my Macbook or my iPod Touch. That same project came close to pushing me to grabbing the Kindle version of James Woulfe's Into the Crucible. In the past, not only were the works I needed not available as e-books, but I was reluctant to use them for serious work since they are harder to annotate and to refer back to. Hell, I print out journal articles to read and scribble on.
I'm still averse to using e-books for serious work unless I'm driven there by desperation, but consider the utility of the Kindle for other types of reading based on newish developments. The big key here is that Amazon's proprietary .azw format is based on the venerable Mobipocket format (.mobi or .prc) files. Although Amazon doesn't proclaim it from the heights newer Kindles can read those non-DRMed files. This leads us to a way to create something close to interoperability. By using the free utility Calibre, you can convert most documents that don't have DRM to the Mobipocket or pdf formats that a Kindle can read. Have a bunch of Microsoft Reader (.lit) or Epub books without DRM? Convert those bad boys using Calibre and you're in business. If you have DRMed e-books, you're going to have to find the software to strip it before converting. It isn't hard, but you'll have to find it on your own...
The new Kindle also boasts a decent web browser based on the same webkit engine as Apple's Safari browser. It reportedly does a good job of displaying the mobile versions of most websites, albeit in grey-scale. The WiFi version does this with just about any WiFi hotspot, but the 3G Kindle lets you access the Internet anywhere AT&T's 3G network is available. Using 3G doesn't cost you anything, which explains why Amazon doesn't really talk about this feature much. Amazon foots the data bill for all Kindle web traffic. Instapaper also works well on the Kindle 3, with some folks calling it the Kindle's "killer app". Rumor has it a Kindle version is in the works. You can even get RSS feeds, Tweet, and read black and white comics (or even Manga) on the Kindle 3.
The Kindle 3's new functionality combined with the inventiveness of users and business are working to make it a device that is useful far beyond Amazon's limited e-book vision. The thing is not a tablet like an iPad or an Samsung Galaxy Tab, but it does seem to have carved out a viable niche for consuming text-based content. I'm a text-based kind of guy, and while I would love to have an iPad to use as a light-weight laptop alternative (paired with an appropriate desktop computer), it's possible that the Kindle + Macbook combo is also a worthwhile option.