My mother-in-law bought one for my father-in-law and I’ve had to test it out over the last two days so i can show him how to use it on Christmas Day!
Firstly, it can play music, which is cool-ish but not a selling point. No external speaker so headphones only. You can view pictures but as it is a B&W screen i can't see this as being appealing either. It comes with about 250Mb (or so) of internal memory but has two memory card slots (SD and Memory Stick Pro Duo) to boost your capacity. I haven't received the SD card yet so cannot confirm how that works.
The screen is small and not offensive to the eyes as some screens are. There doesn't seem to be any screen flicker on it and the fonts are quite crisp. The screen has a kind of matt look to it - like the texture of a matt photograph - so the screen does not glare under a light source. It is not backlit which to me is a good thing. Your normal books are not backlit so why would you want back lighting on this. The pages turn relatively quickly and you can zoom in to make the words appear larger (good for readers with failing eyesight).
It is very light - around the weight of a small paperback - and it is thin. It comes encased in a leather (or leather-look) outer sleeve which gives it the appearance of a thin, bound book. It is easy to hold and the page turning button is close to your thumb (there are two buttons on the side of it too that can be used to turn the pages). You can add bookmarks to the books you are reading. Later, you can go to the Bookmarks section and browse through all the bookmarks you have set.
Downsides...
If you have existing PDFs or word documents you need to change the tag data as it uses this to name the file on the reader.
The only other downfall is the £200 price tag. Get it below £150 (and a bit more maybe) and it starts to look quite attractive (not in a drunk, sexy lady kind of way though).
If you like reading, I think you'll like this.