This current (3rd) generation of the Kindle comes in two 'flavours' - the ?109 Wi-Fi only version (which I own) or a Wi-Fi + 3G version, which clocks in at ?149. Other than the addition of the 3G (allowing you to download books over cellphone signals, rather than having to use wi-fi), there are no differences between either device, bar a slight weight increase in the 3G version (241 grams for the wi-fi only version, compared to 247 grams for the wi-fi + 3G version).
Both devices contain the same 6" e-ink Pearl display, backlight free, and come equipped with 3.3Gb of usable storage space, which Amazon claims is enough for around 3,500 books, which seems about right, given that most books are around the 1Mb size. Unlike other devices, such as the Nook and the Sony range of e-readers, the Kindle doesn't allow for the addition of additional storage space (though unless you load it with .mp3s, you're unlikely to fill the devices' storage capacity, imo).
Compared to other devices, particularly the Nook, the Kindle can, at first, appear to be the 'ugly ducking' of the group. There's no touch screen, no colour, and the keyboard doesn't exactly look brilliant. If you're after something aesthetically pleasing, then I wouldn't recommend the Kindle. If, however, you actually plan to use one of these devices for it's primary purpose - the reading of actual books, then the Kindles' 'failings' suddenly become amongst it's strong points.
First - the big one - the screen. Most e-book devices on the market contain displays that aren't really suited to heavy reading, unless you want to strain your eyes. Most displays are backlit, which, imo, really doesn't make them suitable for prolonged periods of reading. The Kindle (and the Nook) both contain, non-backlit e-ink screens, which are designed to be as close to the printed page as possible (the Nook also contains a small colour touchscreen at the bottom). They'll never get the display 100% perfect, but - well the best way I can put it, is that, I've yet to sit there and think "I'm reading on a screen", whilst reading a book.
Because the device is designed to mirror a physical book, you can't read it in low-light / the dark - in the same way that you can't with a physical book. I've done a lot of my reading in my bedroom, sitting on bed, with a small bedside lamp, and have had absolutely no problems with glare.
From an Accessibility point of view, the Kindle scores major points. Font size, Font Width, and line spacing, are all easily adjustable, and you can have the device read to you, if you want - either via the speakers at the back of the unit, or through the headphone jack. You can also rotate the screen orientation, so if you're reading a text more suited to widescreen - click a few buttons, and you're reading in widescreen.
Amazon also includes, under the experimental options a Voice Guide, so not only will the Kindle read the books for you, it'll read anything on the screen - including the devices user interface - speaking of which.
The On screen User Interface is a bit clunky. Granted, I didn't expect it to resemble an i-Device (Apple probably sends more money designing their UI icons, than Amazons' entire research budget), but it is a lil bit 'awkward'. Fortunately, you're not in that interface all that long - just selecting which book you wanna read, then it goes away. From the Homescreen, you can select which book you wanna read, as well as access the Kindle store, the system menus, etc, etc.
The one problem I can see with the user interface, is that if you do go ahead and load the device with 100s of books, it might take a while to navigate through them. Say you've got 20+ Michael Connelly books (which you should, he's brilliant), and you wanna read The Reversal. You can't simply type in 'The Reversal', to find the book - you have to click through the pages of titles, until you find it, before starting it (unless it's the latest book you've added to your device, in which case it's easier to find).
As for the physical interface - the buttons on the exterior of the device - they're perfectly fine. Personally, when I first started to use the device, I thought the buttons 'were in the wrong place', as each of the bigger buttons, on the left & right, are 'page forward buttons' where as the smaller ones above, are page back buttons. As a 'rightie' I thought the big button on the left was the page back, with the one on the right being page forward. However, obviously Amazon have designed the unit to be equally easy to use for both 'lefties' and righties.
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