David Pogue examines the options.
Seems like the Kindle Paperwhite is best for someone who mainly wants to read books.
For a color device to use for video entertainment, it gets more complicated. Nook, Fire, Nexus, Android... whatever. I'm firmly in the grip of Apple, so I just assume you want an iPad or an iPad Mini (or both). But Pogue's piece might help.
Please shop through my Amazon portal if you can. I've used Kindle devices and, though I'm an Apple person, I use the Kindle app on all my Apple devices and I always by my ebooks — and I have hundreds — in the Kindle format.
Here's some advice I don't see in Pogue's piece: if you're buying a device for someone else, find out where that person's brand loyalties lie. If they already have books in one format, will they be able to read them on another format? The giftgiver won't enjoy watching the recipient furiously Googling for an answer to that question on Christmas morning.
ADDED: Thanks to everyone who's been using the Althouse portal this month. I see the reports and really do feel encouraged by this gesture of appreciation from you. Even though it's perfectly easy to do and costs you nothing, it means a lot to me!