I do not have a Kindle, but sat next to a guy on the plane to Japan who did have one.
In the past (i.e.-without seeing one) I thought it a ridiculous idea, as reading on an LCD screen (typical computer, Iphone, what have you) is far from enjoyable.
But then I saw the Kindle in person---the look of the text is markedly different from a computer screen! I feel they did a great job capturing the contrast and easy to read way a normal book does.
I was in the same boat as you. I thought reading off a device screen would be annoying and too different from an actual book to be enjoyable. Then, I tried out the iPhone Kindle app and was pleasantly surprised! It's actually pretty easy on the eyes and you can't beat the convenience factor if you have to travel. My SO and I read A LOT and therefore when we travel we end up having to lug a whole bunch of books around with us...the Kindle app definitely helps in that respect.