There are several great options for Ebook readers and the technology is helpful for children and adults alike with dyslexia. The following is a Excerpt from a review at WSJ.com:

On the Kindle Fire  $199, Amazon.com

"This is the first Kindle that can do justice to picture-heavy children's books. Although Amazon's children's e-book selection is vast, stick with e-books that are designed specifically for the Fire, as formatting can vary wildly on the older versions. At the moment, none of the kids' books available through Amazon include multimedia enhancements that come with some e-books sold through Barnes & Noble and the iBookstore.

On the Barnes and Noble Nook  $249, bn.com
This brand new Barnes & Noble device is the only reader with a "Read and Record" feature, which lets you record your own narration to your children's e-books. Another Nook exclusive: interactive games. They feature simple animation and objects that wiggle when you touch them. These are currently available for the Nook Tablet, Nook Color and Nook apps for other devices.

On the Apple iPad 2
(from $499, apple.com)
As with everything else, children's e-books just look better on the iPad's big, crisp screen. And the way it displays pages side-by-side—complete with a crease down the middle— is closest to a print experience. Use the Kindle and Nook apps to get access to those devices' catalogs. "

Don't forget it's also possible to get a simple black and white  Kindle with ads for $79. This stripped down Kindle doesn't have Wifi, but it does have books, adjustable font, and screen that reduces glare.

For more comparing the three, see: http://whatswithjeff.com/amazon-kindle-fire-vs-ipad-2-vs-nook-color/

Visual stress is common among many dyslexics (young and old) - and this astronomer / blogger with a son who has dyslexia  posted his tweaks to help improve his son's reading on a Kindle:

"...so with rather of a lot of trial and error, managed to make an overlay for the Kindle and attach it with a bit of accurately placed sellotape. Beforehand Mark set it up with his favourite font and line spacing. It’s not a long term fix, more a prototype to see if the idea works – click on the first pic to see the results up close.

Gave it to Mark this morning and he said it was really helping. It seems the lines help prevent the ‘rivers of light’ effect that appear to make words move around the ‘page’ for him. It may be specific to Mark, but if you’re interested I can make the Word doc templates available for others to download and try. I’m also going to see if I can make the design a bit more robust. He is 10 (sorry – nearly 11) after all!"

He generously posts the file for the Kindle overlay lines here. This dad noticed that his son had a much easier time reading Diary of a Wimpy Kid than with an untweaked Kindle or green glasses.

If it's easier to read, they will read more!