Advice from a teacher
For myself, I am an avid Kindle user and I promote e readers heavily to my friends----However for kids around 7 and 8 I really agree with many of the comments that have been posted here. First of all, kids at that age need books with pictures and colors, so if you got an e reader it would have to be in color, and right now there are none that I know of in your price range. Secondly, and more importantly, kids spend more than enough time working with computer screens and games. While this can be a great educational tool, the computer games are very seductive and I know of way too many youngsters who are practically addicted to them. Lastly, and most importantly, let your kids experience the wonder of a real book with great illustrations--let them become book literate and enjoy the process of reading with you. There is time enough for e readers--and there is definitely a place for them, but let your kids explore the wonder of books while there are still books left to explore.