Typically ebook readers are larger than PMP's with larger screens. If you're going to read for a few hours, then the screen of a typical PMP becomes pretty eye-straining (due to size, contrast, and brightness).
Plenty of free e-books in Mobipocket format show up fine on Kindle.
DRM refers to the fact that you can't view Amazon Kindle books on other devices (including your computer), or on other Kindles - i.e. no sharing, the purpose of DRM.
Ebook readers have extremely high contrast/readability and are extremely energy-efficient, being able to display several thousand pages of material without needing to recharge. eBooks are a narrow product, but they have their own ways in which PMPs cannot compete.
A revolutionary portable reader that wirelessly downloads books, newspapers, magazines and blogs to a crisp, high-resolution electronic paper display that looks and reads like real paper, even in bright sunlight.