Not sure – obviously there’s a publishing format being used by publishing houses and individuals, so I would guess that you could publish to the Kindle format.

If you can browse the web [...]

I’m pretty sure that this isn’t the thrust of the Kindle, but they do have it as an experimental feature and I *was* able to browse heissufficient.com – or at least what you’d see with the stylesheet turned off. Actually, they do have an “Advanced” mode that renders graphics and layout, but it was really slow and I haven’t tried it again.

I’m pretty sure you can’t add an RSS feed to your reading list, but they do have a selection of preselected blogs that you can subscribe to for $1/month, plus 20 or so newspapers to subscribe to.

Can you highlight?

Yes, you can “highlight” in the sense of putting a box around a selection of lines. You can also add a note for later reference. So you could definitely add notes to Bible verses.

Is there any color to this device? Or just black & white?

Monochromatic, so no color. Ironically, one of the publishers listed their edition as “Words of Christ in black letters!” while another was criticized for using a less readable light grey where red was used normally.