Unfortunately, Kindle is not that product.
Firstly, I'm not sure I want a single-purpose device any more. Having owned an iPhone for a couple of months, I split my time on that device pretty evenly between email, web browsing and iPod. The phone part comes a distant fourth for me, but its still better to have that integrated than carrying another device.
John Gruber nailed the content argument regarding Kindle:
Kindle actually is what ignorant critics have claimed regarding the iPod: a device designed to lock you in to a single provider of both hardware and digital content. You can easily and happily use an iPod without ever buying anything from the iTunes Store; without Amazon’s DRM-protected content, a Kindle is the world’s worst handheld computer.
I have not, in the past, had a significant problem with DRM. I have a large number of DRM-encrusted files on my iPod and, well, I hardly notice that they are DRM.
It strikes me that the problem with digital sharing is not that someone receives access to some content without paying, but that the act of sharing increases the number of copies in circulation. What's stupid about Amazon Kindle is that, with DRM, Amazon could actually have delivered the same rights in respect of book lending as we have with paper books. If everyone's Kindle has to go through Amazon, why couldn't Amazon operate as a virtual inter-person library? If I want to lend a paper book to my friend, I no longer have access to that book until it is returned. Why couldn't Amazon use DRM for that purpose? That would be to use DRM for good and not for evil.
My second problem with Kindle is that it doesn't support arbitrary PDF documents. There is just too much interesting and useful content available for free in PDF, and one can always create one's own. The value proposition in a $400 reading device that cannot access any of that content is starting to look increasingly flimsy.
I haven't used one, but I'm going to go out on a limb here and say that my favourite thing about the Kindle is its size. The form factor, if not the actual realisation of the design, looks great. All the while, and I'm sure I'm not the only one, I'm wondering what this device would be like if Apple had produced it.
The iPhone is close to being able to replace my laptop. I just want an ever-so-slightly bigger screen and better support for directly handling PDFs. The size of the Kindle, if you imagine its tacky keyboard replaced by a full-size multi-touch screen looks about perfect.
The Kindle is to my mythical laptop replacement device as the Nokia E61 is to the iPhone.