I think e-readers are great mostly, but they do have their downside. Here are the most important pros and cons pertaining to the majority of e-readers.
Pros:
1) Your heavy 1000-page epic like War & Peace weighs no more than any other book on an e-reader.
2) You can store thousands of books on one.
3) You can still underline and make notations just like on hard copy.
4) Some e-readers like the Kindle-3 have a text to speech converter with a computer generated voice that will read most books to you through the built-in speaker if you want to listen to your books as audio books.
5) You can jump straight to chapters and endnotes by clicking on their number if they've been properly hyperlinked and then just hit the back button to return.
6) You can bookmark pages (Kindle even shows a little dog-eared icon at the top of a bookmarked page) and jump straight to them and back again from anywhere in the text.
7) Kindle and others have built-in dictionaries. Don't know what a word means? Just move your cursor to it and the definition will automatically pop-up.
8) Batteries in e-readers last for weeks without a recharge providing you keep the wireless feature turned off when not in use and actually turn the reader off instead of on standby when you're done reading.
9) You can make folders and use them any way you desire. You could for instance just have a separate folder for each author, or you could have a folder for each genre and then sub folders for the authors etc.
10) You can make the text as big or small as you like.
Cons:
1) At this point e-readers have not used page numbers. Because the reader is free to change the text size, page numbers are a problem. For authors doing research and who plan on using quotes for books they're writing, it's difficult to footnote the page number when you don't have it available! This could really become quite a dilemma in the future as more and more books are being released as e-text only. At least an e-reader will tell you a percentage of where you are at in a given book (whether you're 25% of the way into it or 40% etc.).
2) For those designing e-books, there are limitations that must be worked around such as available fonts and so on. It’s not always possible to make the text in an e-reader look exactly the same as that in a hard copy book.
3) Books on Mathematics must be shown as PDF files because the text size must stay the same when showing equations so that they don’t break apart, and PDF files are difficult to read on e-readers since you might have to magnify the entire page to make it large enough to read, and then you may be in for some side to side scrolling.
4) There is no standard format across all e-readers as of yet. Actually, most do use epub, but Amazon's Kindle is the holdout using the AZW format (based on mobi format). Other e-readers can't read AZW, and the Kindle can't read epub. So, some books may not be available for download in the format you need for your particular reader.
5) E-books are often digitally encrypted and therefor difficult to copy. This means that you can't always share an e-book with a friend the way you can a hard copy book, nor give them away or resell them. In fact, it's often been said that you don't really own an e-book—you just buy the rights to read it. However, books downloaded through Amazon generally give the reader the privilege of sharing the book with one person. Also, for those with the savvy to do it, any e-book's encryption can be broken.
6) You can't flip through pages quickly the way you can with a hard copy book.
7) Some e-books even from big publishers are poorly formatted with spaces between paragraphs, no indents, and no hyperlinks for the foot/endnotes. I've even come across some (especially free books at Gutenberg) that didn't even bother hyperlinking the chapters, and without a navigable TOC (table of contents) it can be tough maneuvering through an e-book unless you plan to read it straight through.
8) Free e-books at sites like Gutenberg often have several errors in them. Everything from misspelled words to missing words and misplaced punctuation.
The majority of the time I can download books through Amazon or free ones at Gutenberg and have no problems at all with them. But there are times that it’s challenging, especially with the free ones. However, for me, the pros definitely outweigh the cons.