Huge yay. I've had one for 2 years or so now. Started with a Kindle 1 I bought used in early 2009. Got a refurb K2 last summer for cheap, and upgraded to the new K3 around Xmas as I passed the K2 onto my parents.
I read a ton more since getting it since it's so convenient to not have to hassle with paper books I'll only read ones. And there are a ton of free books--public domain classics, indie authors giving away books etc.
The screen is great, it's not backlit so you need a light source just like you do with a paper book. But the benefit is that it doesn't tire the eyes like reading on a PC screen or iPad as it really looks like paper.
Downsides are the DRM. There's only a very limited loaning system and books you buy are tied to your account. But that's true of all the e-readers out from Sony, the Nook etc. as well. An advantage to Kindle is they have Kindle Apps for PC, Mac, iPhone, iPad, Android, Blackberry etc. so you can also read every book on any of those devices by downloading the free app.
So I highly recomend it. eBooks are great, and the Kindle is the way to go as the Amazon store has the widest selection of ebooks, and prices tend to be the same or cheaper there than the other stores. And again, the benfit of all those apps where you can read you books on multiple devices (it will sycn up to your current page if you have the wifi on the Kindle on--or turn it on and hit the sync option when you finish reading).