You're right that most laptop screen's aren't good enough for reading e-books, but the OLPC XO is an exception because of its special display. Granted, that display still isn't as nice as e-Ink, but it is good enough for serious e-book reading.
It's some sort of special display that was created just for the OLPC. It has an adjustable backlight. When the backlight is turned on all the way the display looks like a regular laptop display, but when it is turned off all the way, then the display looks like an e-Ink display.
Unfortunately, it does not compare with the e-Ink displays in terms of low power usage, but it is good enough for long reading sessions without straining your eyes.
