The new Kindle is small enough for me to slip it into my pants pocket and read on the train, has enough battery life that the only time it's become an issue is when I haven't charged it for two weeks, and in general is a fantastic and cheap device.
I bought the Kindle to take overseas: my library at home, sadly, doesn't travel with quite the same convenience. It's done everything I've asked it to do and more: the ads are somewhat annoying but are bearable for the price and convenience. The software keyboard is frustrating and the display's set to only completely refresh every sixth turn: this leads to ghosting. There also is no backlight, which should be held against this Kindle if you really need it [but then again: you can't read a normal book without an add-on booklight in those cases, either].
That said, the Kindle (2011) seems to be the distillation of an idea: giving people e-Book reading as cheaply and as sturdily as possible. I haven't had any problems with my Kindle aside from a blemish on the screen that came about from carrying it around without a screen protector and generally being careless with it: it does what it sets out to do. It's not great for browsing the store: you have a computer for that. It's not great for notes: again, you have a computer for that. [I wouldn't recommend any current device for reading and writing notes: the mighty book still wins that war, though the touchscreen-enabled book readers are undoubtedly much better at it.]
If you need an eBook reader and don't want or need anything else, the Kindle (2011) won't steer you wrong.