I have an htc desire, with Kindle app, my itouch has the Kindle app, as does my iPad.
I still have a kindle.
I used the apps for a long time (9 months ish) before I got a Kindle.
and I would have survived carrying on doing so. but I bought more books than I do now, and only really used the apps for holidays, or for hospital appts etc.
now I have a Kindle, I buy a lot less books (I do still buy some, but general fiction buy it and give away stuff I don't buy as books anymore, only as ebooks; before, I owuld have bought more actual books and only the odd ebook)
it is ok reading on the smart phones/ipod, but screen size not brilliant.
it's also fine reading on the ipad, but it's a bit cumbersome to read in bed, i find.
my kindle is perfect. feels a lot like a book to hold (I have a leather case for it), and is not backlit - one of the things I found most irritating about reading on ipod/ipad/phone in bed, tbh - far too bright, even with the screen turned right down.
kindles are fab, and have a place alongside smartphones, imo.
the ipad/kindle debate is more of a personal preference one, I reckon.