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.
Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
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.
Plenty of free e-books in Mobipocket format show up fine on Kindle.
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.