Ironically enough, last semester I did a project proposal for a class I took that involved exactly what is being discussed here. Here's what I came up with:
* 2 back-lit LCD screens that can be folded together. The size is the same as a standard book. The reason for this design is that the non-back-lit devices are good for sitting and reading long-form stuff like books, but it's not as good if you're using it for reference. The reason for two screens is so that you can still incorporate quality book design and you would still have standard two-page spreads, which I think is important with things that use large tables, like an RPG.
* An open platform that allows the user to connect to various content provider servers wirelessly. In my proposal, it worked with wireless network routers, but maybe a deluxe model would work like an i-phone and be able to connect anywhere, any time. The fact that it's open means that any gaming companies that want to participate may do so. Finally, while data moves through computers, data is not actually stored on computers. In other words, you get the content directly using the device, but you can't store it and redistribute it yourself - at least not without hacking the thing, which would be illegal. Every device would have its own unique identifier and all content sold would be keyed to that identifier. You can have up to five devices on one account, as long as they are registered to the same person. If you have to replace one because it breaks, you just call a friendly customer service number and they remove one from your account and add the replacement.
* "books" would have the ability to display multi-media. For example, the content provider could program in an animation that shows how attacks of opportunity work. They could also provide a step by step animation on how to do complicated things, like grappling. There would be a speaker, and it would be voice sensitive, so the book would explain something, the user would say "next step" and it would move on through the various phases until the action is complete. It would also come complete with a die roller, storable character sheets that work in conjunction with calculation sheets. This would, of course, only be helpful if every player has their own device.
* For games where every player does have their own device, they would be able to sync up with the DMs device, which would keep track of initiative as well as effects that have durations. This way you would automatically know when a spell expires, or someone is done being sickened.
* Storage would be solid state, so there are no breakable moving parts, and there would be enough space for thousands of fully colored and illustrated books.
Of course this is not a real product, but I could see something along these lines appearing within the next five to ten years.
