The prototype I saw was definitely nice, but also sluggish to refresh its screen. (They have time to improve it as they move to production models.) The touchscreen works well, but the cool thing is the annotation function allows you to scribble on docs, while the page refreshes only the section you draw on, negating the need to do total page refreshes. There’s also a nifty page scroll bar on the right, and a document switcher on the left, the ability to hide all menus and go directly to a page using an on screen keypad. The store and 3G and WiFi access were not quite working yet.
It looks promising. We’ll see how great their store is. Amazon’s Kindle store wasn’t built in a day.