Can't you get an iPhone for $99 now? Seems like a much better deal with more functionality.
Sure, you could pick up an iPod Touch for $199 but that's twice as much, has worse battery life, looks like it'd be far more fragile, and no way to prevent kids for accessing the more adult Wikipedia areas.
This looks like a great device you could give to your 9+ kids to help with homework.
edit: nevermind. The store page shows this: "Annual Update Subscription $29 for two updates per year Receive content updates for your WikiReader delivered to your door."
It seems to say that the content is loaded once and for all? Surprising… so, it doesn't require a subscription but the content is not live.