The transition when you "flip" the page produces a very strange visual effect. Imagine you are looking at a page of text, and then someone spills a few blobs of ink on the page. The ink spreads out and covers most of the page, and then fades to reveal the next page. It takes about a second. After you press the next-page button, there is a one second delay before the computer wakes up and starts the re-draw process. So, it's about two seconds to flip the page. It's no slower than it takes to flip a page on an ordinary book, so I don't think it's a drawback.
Also, the screen does not look at all like paper. It looks like a light-gray plastic card printed with darkish-gray text with a matte finish. Although it doesn't have the look-and-feel of paper, the readability is just as good. Or, at least its as good as a paper printed with same color scheme. It's very similar to newsprint.
If I were going to use an eBook reader extensively, I would probably need more than one. The size of the screen is good for reading prose, but it is not appropriate for many other kinds of reading. Newspapers, textbooks and scientific papers really need a larger display area. These works are not meant to be digested linearly; the reader is encouraged to wander among the main body of prose, figures, tables, equations, and their respective captions. You need a display area at least as big as US Letter (8.5" x 11") or A4 (210mm × 297mm), and probably bigger. I would really need a 6" x 9" reader for casual reading and a 18" x 27" reader for serious work.
It would also be of great utility to be able to write on these devices. I can live without handwriting recognition, as long as there is a convenient way of filing and organizing my scribbles.
The eBook Reader is the first Sony product that has tempted me since I declared my Sony Moratorium. Nevertheless, at $350, plus overpriced DRM infested books, it's way outside my budget for this sort of thing.