I got to spend a few minutes with the Kindle Fire yesterday. Full disclosure: we have two kindles, an iPad, a smartphone and assorted laptops at home.
The iPad has almost completely replaced the laptop at home, and with a bluetooth keyboard I do most of my writing on it. It comes with me to the numerous evening Meetups I attend.
My kindle comes with me everywhere during the day, because it fits in my pocket which lets me squeeze in lots of spare minutes reading.
The smartphone has been relegated to making phone calls and checking gmail when out of wifi.
The KF is agreeably small and light and I could imagine it being with me everywhere. The screen is clean and crisp. Some reviewers have complained about slow screen response but I did not encounter that. Page turns while reading were very responsive and selecting items from the various menus was easy.
The touch screen made selecting and highlighting text much simpler than on the legacy kindle, so I might pick the KF for technical reading where I do lots of note taking.
One problem I did encounter was in getting to the menu screen. Most apps are full screen so to get to the menu and the Home button you have to touch the bottom of the screen. The location to touch was hard to find. It often took me lots of touches to bring up the menu resulting in lots of unwanted page turns. Presumably this would be something one would figure out over time.
Movies look nice on the KF, though obviously a smaller image than on the iPad. My kindle reading is largely opportunistic, a few minutes here and there. While I'm willing to read books a page at time I don't know that I'd want to watch a movie that way. When I know I might have blocks of time I bring my iPad. So movies wouldn't be a KF draw for me though they might be for my iPad-less wife.
Magazines look much better on the KF than on the legacy kindle.
In the end buying a KF or not depends on what devices you already have and what you want to do.
If you just have a legacy kindle or a smartphone and don't want to do content creation the KF makes sense. If you just have a iPad but no book reader you might get the KF for its extra portability.
For my wife who has a kindle plus dumb phone and wants some internet access we have a couple of choices. We could get a $300 smart phone plus two years of a $30/month add-on data plan; two year cost $1020. Or a $200 KF, possibly adding on the $79/year Amazon Prime membership. That seems like an easy choice for us. Your mileage may vary.