I am only using it for reading books and browsing. I have also downloaded a couple of books in PDF format and sent them to my kindle email address. They read just fine, although you will need to pinch-zoom every page if the text is too small.
Sometime it freezes, and frankly I had to replace the first one (I bought it in store).
I have no idea what people expect for $199. I find it very valuable for the money. I have a feeling by the second or third iteration they will have a dedicated audience just as Ipad and Iphone do.