Apparently the new Google Nexus One phone made by HTC has a 400x800 OLED display that works out to 252.15 pixels per inch - while the iPhone 3GS has a pretty high-res display, I think this is a new record for a production, mainstream product.
Other than backlighting-related issues (causing eye fatigue faster than reflective displays) this would probably make a pretty darn good e-book reader. And phone. And music player. And almost everything else.
FYI, it comes with a 1GHz CPU. Sure, it's not going to be a great CPU but 1GHz is also, AFAIK, a new record in the standard phone form-factor.
What I find interesting is that it took us almost twenty years to come out with a reasonably-available high-resolution display again. IBM had a (approx.) 200dpi display available in the early '90s. I think they sold well into the double-digit unit quantities :-). (It was probably still profitable - I remember the unit price being around $160k at the time.) Since then, mainstream displays ramped from 75dpi up to 100dpi fairly quickly - and stayed there for 15 years. Almost every LCD you can buy today (excluding "digital signage" models) is between 96dpi and 108dpi.
Oh, and the phone is Android-based - which means it's running on Linux.
-Adam