The answer is both. What I have discovered is that my best practices involve using them in tandem. At home, when I am initially reading the chapter or assigned section, I read on my Kindle device. I have a Kindle Touch and I highlight with my fingertip and add notes with the virtual keyboard. Because the virtual keyboard is a bit more cumbersome for typing, I write very brief notes. I might type, "aud. image", "symbol of hope", "connection to F. 451".
In preparation for class, when we will be discussing that section of the text, I open my laptop, open the app and my notes and marks are synced. This means that any notes or highlights done on my Kindle device, also appear on my Reading app on the laptop and vice versa. In preparation, I often open the app and expand on my notes. There is not limit to the amount of text I can type into a note, so on my laptop, where the typing is much quicker and I can write more depth, I can expand on my initial notes.
When we are discussing a passage as a class, I click on my highlight and I am taken to that quote in the text. I project my laptop onto the screen or whiteboard and direct students to the page that we are discussing.
When using the Kindle Reading app, the students find the passage in the text by either using the search function to find the passage, or dragging the scroll bar along the bottom to find the page we are discussing.
Is it the same as a paper book? No. As with all technology, it is not an even trade. We gain some things and lose others.
Locating a passage in the text take a different set of steps than just flipping pages. It can be slower. If the e-book doesn't have page numbers, the search function is your only option and what you enter into the search field needs to be typed in exactly as it appears in the text. This can slow down the old practice of "Turn to page 119 and go the third paragraph." To address this hiccup, I project the text onto the screen in the room, so that we are not losing class time waiting for everyone to find the passage. They can all see the passage on the screen. That way we don't have to wait in radio silence for all of us to get where we need to be.
On the upside, by being able to project a text onto the screen, we gain a shared focus. I like that we are all looking at one jumbo text. I like that I can put my projection screen away and "write on" the text by writing on the whiteboard. When discussing a particularly meaty passage, I can mark up the text by writing on the white board on top of the projection. If you have a Smartboard you can write on the text electronically.
In the classroom setting, when discussing an e-book as a class, I think the reading app is essential. However, if we are talking about independent reading, literature circles or other work in groups or as individuals, a Kindle device alone is suitable.
What about using just Kindle devices only for a whole class discussion? This may be your situation if you are at a school that does not have a 1:1 laptop program. Perhaps you just have a class set of Kindles. Can a whole class text be used then? Yes, but it depends on the device. The Kindle devices have search functions as well. This will be very slow though, with the plain Kindle that has no keyboard. The most basic Kindle has only up, down, left, right and click functions, in addition to a page forward and backward button. So, when typing on the keyboard, you have to use the up, down, etc buttons to move the cursor to the right letter, then click, then navigate to the next letter and click. This could be very cumbersome and tiring and will result in delays. (For a detailed description of each of the Kindle devices and my recommendations, please read this post.)