I have one! It's a first-generation one, granted, but I absolutely love it. I tend to read mostly classical lit (such as War and Peace) and fantasy (such as A Song of Ice and Fire), so not having to lug around 4" thick books is utterly amazing. I don't use it for school as much as I did last semester, but that's mostly because it's obnoxious to try writing papers with a Kindle when MLA citations haven't really caught up to the technology yet. However, at least 90-95% of my pleasure reading is done on the Kindle. The only exception I can think of in the last few months is Lolita by Vladimir Nabakov, and that's only because I wanted to take full advantage of the annotations. In fact, I read way more than I used to because of my Kindle; I used to read maybe once or twice a week before I bought it, and now I go to bed at least an hour early so that I can read before I go to sleep, and my Kindle's always in my purse in case I have some free time.
You can definitely download out-of-copyright books from Project Gutenberg, and if you're the type that doesn't care about that sort of thing, you can find pretty much any book pirated online. I'll generally buy books on the Kindle through Amazon unless the author/estate, for whatever weird reason, has issues with ebooks (such as J.K. Rowling) or if it's outrageously priced on Amazon (meaning as much as/more than the paperback version. Fuck that, I'm not spending a ridiculous amount of money on something that costs nothing for them to print and distribute.)
As to whether you'll get looks for walking out of the bathroom, I honestly can't say, but I doubt many people will know what the Kindle is if you get a case for it
Someone might hijack the topic later and tell you about what happened with Amazon and 1984 a few months ago. Basically, Amazon gives you the power to publish books online, and a company started making money off of selling cheap out-of-copyright works. This wasn't a bad thing until they put Orwell's 1984 and Animal Farm up--two works that are still in copyright in the US. Amazon yanked the books from their servers, and then people realized that the books started disappearing from their Kindles. The intertron went into a huge uproar about Amazon hacking into Kindles and deleting the books, but Amazon only deleted them server-side so that when the Kindles went to sync they found nothing there and deleted it accordingly. This can be solved in one simple way: when you buy a book from Amazon, save it to your computer. It is easy to do either through the Amazon webpage or by simply Ctrl+C'ing the documents folder on your Kindle, as I do. That way all of your page counts, notes, etc. will be saved, and no matter what Amazon does server-side, you'll have a backup. But yeah, whenever the Kindle's been brought up lately someone's cried about the 1984 incident, so now you know what it
actually means to the owner of a Kindle.
But yes, long story short, I highly recommend it. If you can go to a Best Buy/Borders/wherever and see the e-ink display (albeit a Sony one) in action, you'll realize that CG is absolutely right. It's not backlit or anything--e-ink works almost like an etch-a-sketch, so the battery life is fantastic and it doesn't hurt your eyes at all. It'll certainly blow reading on the IPhone out of the water.