I'm really not at all sure that this is a good idea! Waterstones is a traditional High Street bookshop in the UK. They don't have a great track history of selling on the Internet and, frankly, why should anyone who wants an eBook buy from them?
This also begs the question; What format will they use? I remember the bad old days of video recorders when everyone said VHS was bad, Betamax was better and Video 2000 was the best. Me? I bought Video 2000. As a result, I couldn't play any commercial tapes on it, since nobody was releasing any. So: great technology, next to no content.
The Kindle eReader format is a bit like VHS. It;'s pretty damn' poor but it's there - and there are huge numbers of people are using it. It will have to be improved to support better formatting for things like graphics, programming code and equations. And that will doubtless happen in time. But if other people release eReaders, they should adopt a well-established and widely supported format. If Waterstones do adopt an established (Mobi/Kindle) format and they sell their hardware cheaply they may have a success. But if they try to lock readers into their hardware so that they are obliged to buy eBooks in a proprietary format from Waterstones's stores, they might as well forget it. It ain't gonna happen....
BBC News - Waterstone's to launch e-reader