Okay, someone has to bring up smartphones as an alternative in this thread, so it might as well be me ... :-)
Seriously, I certainly agree that dedicated eReader hardware has its place in normal life, but backpacking? Give me the best multi-function device. Since I already also want to carry a cell phone and a camera and maybe a GPS, why not combine these functions along with book reader, internet access, MP3 player ... you've likely seen this list of funtionality before, but perhaps worth repeating.
A modern smartphone is a pocket computer that happens to also function as a phone. The suite of apps available on it is likely to beat out what any dedicated reader hardware can do, indeed until these are supplanted by more general purpose tablets. And then a smartphone with a decent screen is going to be a better choice for backpacking due to the overall size, weight, and perhaps durability on trail issues.
My Droid X worked great on the CDT for all of these things, to include as a book reader in the last month or so when nights got pretty long (limited daylight hours). It has a 4.3" screen, so really not a bad book reading experience IMO. But I'm also content to read on the 3.2" screen on my new phone, one I just got because Verizon charges me too much to use my Droid X at home (!).
So when you're thinking about a book reading device, do think "multi-function device" and consider going the smart phone (or even the smaller-variant tablet) route.