Content could be interactive books and magazines, cookbooks, travel planners that incorporate real time weather, or whatever else the developers dream up. Zagat, Electronics Arts and others say they are on board. Games like Chess and Othello would be a good fit. The possibilities are endless, just as they are on any computer platform or smartphone. What's lacking, of course, is color and a fast screen refresh, so games with any action are going to be kind of lacking. I don't think the Kindle is a good platform for Need for Speed or Skeeball.
Amazon is surely reacting to the upcoming (probably) tablet from Apple, which is likely going to offer e-books and magazines in full color. Of course the battery life likely won't match the Kindle. I get about 2 weeks between charges on my Kindle if the wireless feature is turned off. Amazon has also adjusted the royalty split, announcing yesterday that authors will get a 70% share of sales of e-books, matching what Apple pays developers through iTunes.
Amazon could also get a place on the tablet itself. It already has a Kindle app for the iPhone, so it wouldn't be a stretch to give people access to their Kindle purchases on any new device Apple comes up with. It's interesting to watch everyone scrambling after a product not yet released. If Apple, as expected, announces a color tablet next week, would it kill your desire for a Kindle or other e-book reader?