I think a Nook would be a great gift. In fact it is one of the items on my wishlist this year.
The Nook is Barnes and Noble's ebook reader. From my perspective it's better than Amazon's Kindle because it's library ebook-friendly. The Nook is compatible with various ebook formats including EPUB, PDB, and PDF. Being able to get library ebooks is important to me because I'm resistant to buying ebooks. At this point in my life, I'm only buying books (for myself) that I know that I'll want to read again. Because I'm an archivist I'm especially sensitive to concerns about the lifespan of electronic files (will the Nook or any of the other readers be around 20 years from now? will these file formats be supported on whatever new technology we have at that point? etc).
I have to admit that I hadn't seriously considered getting an ebook reader until this year. I like reading books. I like the experience of reading books, the feel of the paper, the weight and heft of the monograph. When reading PDFs, I prefer to print them out so I can underline the text and make notes in the margins. I have, however, slowly come around to the idea of an ebook reader. I see the benefits--great for travel, easier to read when cats are harassing you, etc--and I've gotten to see a few different readers in person.
The Nook also has this wonderful Alice in Wonderland case.