I have a Kindle and LOVE, LOVE, LOVE it! I am a die-hard bibliophile and wondered how I'd do without the tactile experience of a paper book...I can tell you that
is not even an issue! In my experience (and in chats with several other Kindle owners who all use it differently), I REALLY like the "E-Ink" display and the ability to choose the font size (and even number of words per line, if you want to...) I find it to be EXTREMELY eye-friendly in many lighting environments. I use the clip-on light when I want to read in bed. It is much, much friendlier and more versatile than a back-lit screen for eye fatigue.
The Kindle gives you the capability to download and read PDF files; one of my friends who is a knitter loves being able to download patterns! I'm just returning to knitting after a couple-year hiatus and haven't used that yet. Regarding books and patterns with pictures, the Kindle does
show pictures, only they are in black & white. If color photos are something you would like, it doesn't have that ability yet. Again, the display quality is excellent.
Overall, I find the Kindle to be worth every penny: bazillions of free ebooks, less expensive new releases, great battery life, very nice "tactile" experience, great size (I have the Kindle 2--the DX, which is larger and substantially more expensive, would be even better if you plan to use it for things with heavy graphics, charts, etc.) As an add-on: I purchased a cover that is "vertical" (as opposed to opening like a traditional book); the cool thing is, I can stand my Kindle on the table like an easel when I want to be hands-free. I'm thinking that will be a great feature when I'm knitting!
I highly recommend this product! Hope this helps? (If you do decide to get one, give me a yell...I have some post-purchase tips and tricks that will enhance your experience with it! )