They have recently demo'd colour versions, I am told (by someone who actually knows some people on the team). The problem with the technology is the refresh time; a page paint takes a substantial fraction of a second, and there are issues with local updates, since the pixels actually overlap slightly, so that un-drawing leaves fringes (the iLiad's UI largely just avoids doing this).

I don't agree with the comment about the manufacturer being stupid, however; the unit as shipped is running Linux, and the unlocking process, although it uses the same field upgrade conduit as the remote reflashing mechanism (viz: hit a button the website, hold a button on the device), doesn't do much more than add a mechanism to start a console. They're very supportive - I'd even say enthusiastic - about people doing this. The reason they ask you to sign off on a warranty waiver is because the hardware is very much software controlled: the display, the power management, the stylus-based input, and the field upgrade mechanism are all quite 'soft', so if you don't know what you're doing and tinker anyway the risk of 'bricking' the device is substantial. Since what warranty warrants is the experience of the device as an ebook reader and notepad, I don't think their policy at all unreasonable.

Perhaps it would be nice if there were severable hardware and software warranties, but that would change the engineering space a lot - they'd have to provide low level drivers for an external keyboard and (somehow) monitor, or a network-oriented boot monitor, or something.