The market leading e-reader gets refreshed with a Wi-Fi only option and a zippier screen.

Amazon today introduced a new version of the Kindle eReader -- Kindle 3 -- that shows it's not backing down from selling dedicated electronic reading devices.

The new Kindle, code-named Shasta, doesn't have a color display or a touch screen, both long-rumored to be in the works, but it is smaller and lighter, and has a longer battery life than the previous model.  Since these are the Kindle's key advantages versus Apple's (AAPL) iPad, the improvements further distinguish the two rival devices.

The new Kindle's six-inch screen is the same size as the previous version, but the body is 21% smaller, making it small enough to slip into the pocket of a suit jacket. It's also 15% lighter, weighing in at just 8.7 ounces compared the hefty 1.5 pounds of the iPad Wi-Fi model. That's crucial considering that users often hold their eReaders with one hand while riding the subway or lying in bed. More