The new Kindle also offers a better contrast than previous editions and it looks fantastic compared to every other e-reader I have seen. I have no trouble seeing the screen in dim light or in bright sunlight - it really opens up the ability to read almost anywhere you are. Of course, you'll still need a separate light for extremely dark areas.
Another big addition to the Kindle 3 is that it offers double the storage compared to Kindle 2. I've never had a problem with the amount of storage since I can't possibly see myself filling up that much space (I don't put mp3's on it), but perhaps in the future, if certain applications or media files are put on the kindle, it could have been a problem. The additional space in the new model is definitely a welcome addition, but bringing back the memory card slot that was included on Kindle 1 would have been an even more welcome addition in my opinion.
Among e-readers, I definitely recommend the Kindle 3 if not just because it has a better size/form-factor, contrast, battery life, and speed compared to every other e-reader I have tried. On top of that, you get the wonderful amazon buying experience and selection for all your literature and can keep your kindle library intact between whatever other device you want to download a Kindle application onto.
The question of whether you need a Kindle vs another type of device for reading becomes a little more tricky and really comes down to what you want to use it for.
Do you want a device to read novels on, perhaps read outside, and have something very light that you almost forget it's there? Buy the Kindle.
