Just tossing my own two cents into the mix, mainly because I can:
I bought an Asus EeePC netbook a year ago to be an ebook reader for games and a machine for conferences/conventions, and spent about $300 on it. It isn't the greatest, but it's not horrible. The saving grace is surely the 6+ hour battery compared to the 1-2 hours on my laptops. The scrolling for most RPGs did become a bit of a hassle, and some graphic heavy books were a bit of a problem (Dresden hasn't run very well, honestly), but it's a doable option for you if you are on a tight budget and choose to shop around.
Laptops are also a good way to go in general if you want something that's a bit more versatile than an e-reader while being more powerful than a netbook. As previously mentioned, they are getting cheaper as time goes by, and if you choose to shop around, you can get one at a decent price.
I personally haven't used many of the standard e-readers (Nook, Kindle, or the Sony e-reader) due to having my laptop and netbook, but a friend of mine did say that his Nook fit the bill for him without any major issues. Not sure on the print and readability, nor can I confirm or deny the issues with the DFRPG, but it's a start, ne?
I'm not much of an Apple person, but one of the local gamers I know swears by his iPad for reading a book and having the dice rolling apps on the side, which gives me some hope for the next generation of tablet PCs (such as the HP Slate, which has a softer pricetag than the iPad).
There's also a device that was released not long ago called the Entourage Edge. It's one part e-reader, one part netbook. It's pricetag is also around the $500 range, but the local Instructional Design department seems impressed by it and will be tinkering with them soon enough.
In any case, best of luck with finding what you need!
--Crion