As a case study I created a little E-Book Reader, based on Arduino Hardware together with the DOGXL160 shield (http://schmelle2.de/wp/arduino/shields/dogxl160-shield):
The code is part of M2tklib (Google Code Archive - Long-term storage for Google Code Project Hosting.) and available as example.
Oliver
Great application,
can it read the books from an SD card?
Think Amazon will shiver and lower the prices of their KIndle 
Unfortunately, the shield does not have SD card reader. I put the story directly into the hex file.
So I guess that this devices needs some improvement in order to compete with Kindle. 
Oliver