There are tons of free books, library books and books you can purchase. The space they take up is really minimal. It's music and video that will take up your space. and yes you transfer them but I find it to be pretty easy.
We each have the minimum data plan which here is 200 MB a month. I use mine mostly on wifi and have yet to max out my data. I think where you get into needing the unlimited plans is when you start streaming video or radio like pandora... that will use a ton of data in no time flat. It's very easy to track usage, too.

I have the one that came out before this version that talks to you.