The iPad may have sucked all the wind out of the Amazon Kindle's sails, but rumor has it a refresh of the lineup could be coming as early as August. Sources quoted by Bloomberg claim that the new device will be significantly thinner and lighter than the previous model and would feature a higher resolution display.
This sounds like a promising start, but those holding out for a color or touch screen version will probably be stuck buying an iPad since neither feature seems very likely this time around. It would seem that Amazon is content to concede the market for e-readers with benefits to Apple, and will continue to focus it's efforts on the hardcore book reading crowd who continue to favor dedicated devices that are lighter to hold, and easier on the eyes.
By reducing the weight and improving the legibility of the display, Amazon appears to be in a good position to continue fending off competitors such as Sony who have done a fairly competent job of catching up feature wise. It remains to be seen just how big the market for dedicated reading devices ends up being, but I would venture to guess that it's a heck of a lot smaller than the tablet crowd.
Do you have any interest in the Kindle? Or is your fickle fancy leading you more towards a tablet?