Comment Nexus 7 + DODOCase (Score 1) 415
My personal suggestion (and current setup) is a Nexus 7 and a Dodocase (http://www.dodocase.com/products/hardcover-for-nexus-7). The Nexus 7 is a great all-around device for just about anything and the DODOCase is essentially a hand-made hard cover book that when opened and held apart like a book makes for a comfortable, and very traditional feeling reading experience. When you want to use it as a tablet just fold the cover behind or use the included strap to prop it up for watching movies and so on. Also, the adhesive that many people questioned as a poor design decision holds the tablet in place very well and is unobtrusive, it really shouldn't concern anyone unless they're swinging the thing around their head by the cover...
I had a rooted Nook Color prior to this that I also liked, but the extra horsepower of the Nexus makes a substantial difference for the non-reading activities you might use it for. The only thing I really liked more about the Nook was the very nice rubberized finish. The Nexus doesn't feel as rugged but it still a very solid device in its own right.