MG Siegler has the scoop:

Again, the device is a 7-inch tablet with a capacitive touch screen. It is multi-touch, but from what I saw, I believe the reports that it relies on a two-finger multi-touch (instead of 10-finger, like the iPad uses) are accurate. This will be the first Kindle with a full-color screen. And yes, it is back-lit. There is no e-ink to be found anywhere on this device.

I think Amazon’s tablet will be successful because of the brand. People trust Amazon, so they’re likely to buy.