Oh boy. This will soon to lead to — E-Readers and iPods are causing an eyestrain on our children — we need more money to prevent eyestrain!
iPods are horrible, but I have a Sony Reader with e-ink technology (the same as in the Kindle and others). I would say I have less eye strain than with a standard book.
One funny thing, my wife and I were looking at a demonstration unit at Borders, and we thought that the display was one of those cheesy print-outs like they put on plastic mock ups. It looked too much like paper for us to believe that it was the actual screen--that is, until we pressed one of the buttons and it flashed and changed to the next page.
One of the problems with standard books is that the high contrast with many text books is harsh under a bright study lamp. The e-ink display is closer to the contrast of a newspaper.