AT&T showed off the just released ad-supported Kindle 3G with Special Offers from Amazon (on the right, in white) at the Holiday Preview event in New York City. As you can see, the sign lists the price of the e-reader as $164, which is $25 more than the price drop ($139) Amazon announced this morning.
According to AT&T's Scott Vanags who walked me through the new Kindle 3G, the device itself is essentially identical to the ad-free third-generation Kindle 3G (in black, above, $189) in specs, but just has a Flash layer that serves up ads from Amazon's partners. As you can see in the photo with the two Kindle 3Gs side by side (though not perfectly aligned) and in direct sunlight, they look the same on the outside.
The biggest difference between the two Kindle 3Gs is in content. For the slightly cheaper ad-supported Kindle 3G, you need to put up with "money saving offers," advertisements as screensaver (as pictured above), and a small banner ad on the bottom of the home screen. You can also interact with the banner ads by selecting them in the menu to visit the advertiser's website for more details, but you are not required to do so to earn your Kindle's keep.
Like the ad-free Kindle 3G also available from AT&T, the owner does not have to pay for data service or sign a contract (Amazon picks up the tab on your 3G service with AT&T), plus the device works in other 100 countries and territories thanks to AT&T's partnerships with carriers around the world. So it's a good option for frequent flyers who don't want to deal with international data roaming rates every time they fly. That said, Amazon does note the sponsored Kindle's battery life may not as long (10 days) as the Wi-Fi only version (3 weeks) so that could be an issue for travelers.
If you can spare an extra $50 then the ad-free Kindle 3G would probably be best, but for frugal readers who would rather spend the $50 on purchasing digital content to enjoy on the Kindle, then the Kindle 3G with Special Offers is the cheapest 3G e-reader out there sans contract and service.
The Kindle 3G with Special Offers is available directly from Amazon right now, with an upcoming roll-out to AT&T stores soon.