I have been seriously considering an Amazon Kindle even though the industrial design is far from pleasing and it can't really replicate the feel of a book. The funny thing is, the Kindle has a very Moleskine-esque book cover which may help to bring this gadget closer to a real book....or it may inspire someone to cut a hole in the pages of an actual Moleskine notebook and put an iPod touch inside it for a mini version of an e-book.
An x-acto knife, PVA glue, and a jailbroken iPod touch are what you need. Not to mention really good eyesight. Like the concept, but for actual book reading I think the small size is too much of a barrier for me.