The Kindle is already able to read more than just Amazon DRMed content, it can handle a number of formats.
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).
We've known for some time already that Amazon's AZW files are actually Mobi files, but Amazon didn't share Kindle's Mobi PID which would allow one to buy encrypted Mobi books for Kindle.
If you read some of the Kindle discussion groups, you'll see people complaining about "no backlighting", and then a few days/weeks later they will be lauding the fact that it has no backlighting.
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.