I love my Kindle, but it uses an older e-ink technology that's a little slow and doesn't support color. Not big complaints from me and I don't mind the refresh time to flip pages, but it's something I've heard quite a few people complain about.
I saw this note that researchers have a faster e-ink that changes color quickly, and could lead to richer, better working displays.
One one hand I think that's great, but on the other I don't like the idea of using more power in the display. I assume color will do that, but I'm not sure I'd want to sacrifice the great battery life I get on the Kindle for color. Maybe in a different device.
However if you read more magazines, or even newspapers, I can really see where this would help. Having the ability to show color would really make the experience better, but it would have to be crisp, sharp colors. At least, IMHO, 65k colors, and 1024 type resolution. If it looks much worse than real paper, it won't really get people excited.
However for many things, perhaps even displays, signage (think menus at restaurants), this could prove very interesting. flyers, advertisements, bulletin boards, etc., all might possibly benefit. Maybe even with coupons personalized to you if you subscribe to services from local businesses.