Here's another one of my lists in no particular order of reasons I like my Kindle for college courses. Keep in mind I am a History major and English minor, so your mileage may vary. I'm lucky in that a lot of the things I have to read are not only available novels, but also in the public domain.
Searchability - This is hands down my favorite part of using a Kindle for Kollege (see what I did there?). This past semester I was writing my Senior Seminar in History final paper on Fashion and its effects on the Black Plague and vice versa. I was able to find so many resources just through the amazon site that I did the entire paper using nothing but my Kindle and JSTOR (I'd love the DX for the latter!). But since I could search through the books I got, I could download something like "A Journal of the Plague Year" and immediately find any and all passages mentioning cloth or fashion.
Portability - I had about 22 books over 3 classes this semester, and that's not counting Spanish. It was so bad that I had books literally falling out of the floorboard of my car. I got my Kindle about 3 weeks into the semester and was able to replace over half of those with ebooks. This was especially useful in my Craft of Fiction class where the professor kept alluding to texts we weren't discussing that week. I always had them with me. The downside was that my huge British Literature and Granta short story texts weren't available. They were those ridiculously thick books with the really thin pages that are so awkward to read and carry. But at least I got rid of some of the others.
Price - Of those 11 or so books I replaced, I managed to get several of them for free or as little as one or two dollars. These were all books that I had either purchased from the University Bookstore for $15 after waiting weeks for them to be available or online from places like half.com where I still had to pay $4 shipping on top of the low prices and then wait and pray they got delivered on time. Jane Eyre, Mrs. Dalloway, North and South, The Chronicles of Froissart, Gawain and the Green Knight, The Canterbury Tales, Dante's Divine Comedy... I got them all for free or nearly so. From the Brink of the Apocalypse, What is the What and my Spanish-English Dictionary I had to pay a bit for, but still got them cheaper.
Highlights and Notes - I absolutely HATE highlighters. I never draw straight lines, the colors are always obnoxious and bleed through the pages and I never have the marker handy when I need it. That or I just flat out lose the thing. Then the awkwardness of trying to hold the book and highlight the text... being able to do it through my Kindle was enough to bring a tear to my eye. It was fast and didn't ruin the text. I could pull up a list of my highlights without having to flip through the book and hope I didn't miss it. I could even clip them all to a text file if I was so inclined for cutting and pasting goodness later. I NEVER highlight passages in Fiction, but now I always do and it helped immensely during book discussions in my Craft of Fiction class.
Book Discussions - A lot of people wonder how easy it'd be to use a Kindle in a reading group or the like, but I found it was even more useful than having the book. I could easily type in a line to search for to find where they were in the book, and when someone brought up something they saw somewhere else in the text that related but couldn't remember the page, well I could find it in a few seconds. Of course the lack of page numbers can make it difficult if that's all they go by, but if you've read the book or someone quotes a passage from the text then it's easy enough to keep up.
Walking to Class - Unfortunately I only learned the trick to this late in the semester because I did try before but I still found it difficult. At any rate, no matter how windy it is you can have your Kindle out reading stuff for class while trudging across campus. Just don't make the same mistake I did and try it on the smallest font setting. Bump it up a bit even if you have good eyes and it's really easy not to get lost even while walking.
.PDF Files - Again, I wish I had the DX for this because it would be one thousand times better. Some .pdf files work okay on the Kindle2, but a lot of the ones I need are straight scans from books provided by my professors. This means they showed as small pictures which were difficult to read. On the DX I imagine they'd be beautiful and wonderful and well worth my $500 if I wasn't so strapped. So having .pdfs is nice sometimes, but having them on a DX would be nicer.
Citing Books - Okay, here's one of the main problems I ran across with using my Kindle for research. My history professor was also the head of the department and my advisor. She really didn't like me citing Kindle Location numbers and asked me to get physical copies to cite. This is done easily enough through google's book search, or if you're lazy and a bit more daring just do some math. Find out how many pages are in the physical book then take the percentage from your Kindle location and voila, you have a general page number to cite. To be more exact, though, I'd use google books.
Sparksnotes - This saved my butt quite a few times in my British Literature class. I messed up and did the wrong readings only to look in my syllabus and see we had a quiz that day on Mrs. Dalloway. I pulled up sparksnotes and read it on the way to class and actually passed after not even cracking open the book. The internet can be clunky, and it definitely takes some getting use to in order to use a site like sparksnotes, but once you do it's great. I also got to use google during class to help with some of our discussion questions so all in all it's pretty handy. I could always do this on my cellphone, but it's so much faster and easier to read on my Kindle.
I have heard from people that you can go to the publisher's sites for most textbooks and get electronic copies cheaper. I didn't try this at all since I had already paid the hundreds of dollars for mine that semester so I can't say for sure how well this works. All I know is that for my money the Kindle has helped me -a lot- this semester and will continue to. The nice thing is, even after graduating I'll still be using it unlike some of these textbooks <glares at poorly written US History text>. Hope that helps and gives you some ideas. I'll be glad to answer any specific questions you have as well.