If you want my quick and dirty take: It's well worth having if you travel a lot, and read a lot of fiction. If you don't travel, or if you read a lot of business books (or books with a lot of pictures and/or diagrams) then you should probably think twice.
And now, on to the rambling discourse.
The Kindle is great for traveling because of its size (7.5" x 5.3" x 0.7") and weight (10.3 ounces). This gives it a footprint that's slightly larger than a trade paperback, but much thinner. This form factor gets you a large reading area, keyboard, cellular connectivity (for downloading books over the Sprint network), and a lot of books. I say a lot because the device has 200 MB (that's base 10 for you pedants or lawyers out there). If you're used to the world of iPods this may seem minuscule, but books, unlike songs and movies, are typically around 1/2 MB in size (meaning you can get about 400 books onto the stock device). If the built-in space is not enough, or if the books you purchase are atypical, you can expand the memory capacity of the Kindle using standard SD cards and carry around a ridiculous number of books in this footprint.
It's also very resilient. Mine's been to Everest base camp on the Tibetan side and almost made it on the Nepali side as well (my failing, not the Kindle's). On Amazon's comment page someone claims that his Kindle survived when his son threw it out of a jeep moving at 30 mph.
Also on the plus side - the Kindle makes it easy to look up words that you don't know. Simply scroll to the line in the text, push the button, and select lookup. Hopefully my vocabulary (and spelling) will improve. Now if they could just find some way to incorporate the pronunciation features of http://www.m-w.com!
There are some downsides, though. You have to retrain yourself to use the Kindle. The buttons are awkwardly placed and it's just too easy to accidentally push either the "Next Page" or "Prev Page" buttons. It took me a couple of weeks to reach the point where picking the device up didn't lead to a struggle to figure out which button I'd pushed.
Likewise, the screen refreshes take some time. If you read quickly you'll eventually start pressing "Next Page" before you're done with the current one in anticipation of the delay. One observation without any supporting evidence: refreshes seem to take longer in cold weather. I can't confirm it, but it certainly felt that way at Rongbuk.
Amazon likes to tout that there are more than 190,000 books available for the Kindle, but I've ended up purchasing several books ("The Climb" by Anatoli Boukreev, "Touching the Void" by Joe Simpson, and "Addicted to Danger" by Jim Wickwire and Dorothy Bullitt) because they weren't available for Kindle. (NOTE: There are other, non-climbing related books that I have looked for on the Kindle and not found, but I didn't end up buying the hardcopy book - neither "Good to Great" nor "Built to Last" by Jim Collins are available on Kindle).
Amazon also likes to tout that most books are $9.99 or less and that's true of the more popular books, but for business-related books and textbooks the price can be as much as a hardcopy. Overall the pricing feels arbitrary, and attempts to do a TCO calculation for the Kindle vs. buying hardcopy are not as straightforward as assuming that you'll pay $20 for every hardcopy and $10 for every kindle edition.
The Kindle (at least the current version) also does a poor job with diagrams and pictures. I purchased "Presentation Zen" by Garr Reynolds for my Kindle and was disappointed to realize that trying to differentiate between good design and bad design was impossible on the kindle. There either needs to be more resolution or a color display. The issues around books with diagrams and pictures are further compounded by the increased size of the book. "Presentation Zen" is roughly 10x the size of a text-only book. So not only is it difficult to read on the Kindle, but it's also using up the memory capacity of 10 books.
There are experimental features available for the kindle such as an MP3 player and a web browser. I have not used either of these features, and don't plan to - I've got the iPhone for that :)
If I had to rank the Kindle on a scale from 1 to 10 I'd say it's an 8.
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