1. Apple iPadThe premier e-reading device is the Apple iPad, for two reasons: 1.) Its high-quality full color screen, and 2.) It's ability to handle everything from ebooks (from multiple ebook stores and in multiple formats), magazines, PDFs, newspapers, web pages, emails, and many other electronic files. It's the information omnivore's device. If you just want to read books, there are better options.
You can also read this list in text format in the companion blog post.