EInk is definitely better, but I read the entire "Game of Thrones" series last summer on my iPod touch using the Kindle.app.

I have used the GoodReader app on iTouch/iPhone and read about 10 MB of txt files so far. (The 2001 triology, all Stainless Steelrat, the Red/Green/Blue Mars triology, a lot of Heinlein, the Ringworld triology)

I find the iDevice very easi to read on. Perhaps e-ink is even better.