I have been thinking a lot about ereaders and the iPad and waiting for just the right combination of features. My previous thought was that we needed to be able to see a true image of the book pages and then have the ability to write on the image of the page.
I still want that, but I can think of something better. When I was reading for my oral exams as a doctoral student, I used a pen to bracket text in every book and article I read. My next step was to input the text word for word or in the form of a note into a big document, making sure to label each quote with the proper page number for purposes of annotation.
My need for a .pdf image of a book page would go away if each time I highlighted a quote, the ereader software would store the quote with information about the true page number of the quote (not some electronic “location”). I don’t think it would be hard to get this feature done. The manufacturer who does it will own the academic market for books, which is sizeable (you ever been in a prof’s office?).