Apparently you can download whole books onto it, underline passages, search specific ones, and hold over 1000 books, and that's just on the first Kindle. This is the second one. I'd say it would be quite useful when doing research on the fly or to just beat somone in an arguement about a book.
Kindle is always amazing but Kindle 2 doesn't seem to be that much different or beneficial compared to Kindle 1 in other words it's not much of a new version instead it's just a new patch, not worth a try.