Maybe it's because I already own a Kindle and an iPad, but this seems pretty underwhelming to me.
If positioned as a reader it really has a great feature list apart from not having e-ink. I think if they can pull off a viable magazine/newspaper store in addition to the media rich books, like they demo'd with the children's books this can be a very good product. At $250 too, it makes you wonder where Sony now stands in this race.
I like though that they are throwing a new dynamic into the ebook wars. Not only are they challenging the Kindle with this product, but they are challenging the iPad to an extent. I am glad they didn't just try to duke it out in a race to the bottom for a price war.
This adds a nice new dynamic to the market I think.
I really think that B&N, as well as anyone for that matter, is taking a big step backwards by putting an LCD in to their reader. If they find some way to make a back lit e-ink reader that you can use in the dark and it is as comfortable as if you were reading by sunlight or lamp light I would jump on that in a second. But, adding these gimmicks like a browser and games and "extra functionality"... give me a break. I have my kindle cause I wanna read things, I have my iPad and my computer to surf the web and do other things.
I'm not going to by a nook with a lame excuse for android and think "oh yeah, this will be a great way to search the web." I want to read books... if they really want my money, they should offer me the best way to do that. an LCD is not it