I recently bought an electronic dictionary. It is the Sharp "Brain", model number: PW-AC910. Some of the features this badboy has are great and I recommend you make sure your electronic dictionary has these features if you are in the market anytime soon.
The ability to write out a kanji you have seen but have no idea of the meaning or how to say it. This is such a huge feature because without this, there is no way the average ALT user will be able to have a go at understanding any document in Japanese that they are trying to decifer.
Hiragana for kanji
The electronic dictionary market is not an English speakers market, so we have to use a product designed for a Japanese user. So when you look up an English word, the answer is shown in Japanese, and that is generally in kanji. So if that doesn't help, you will also need the answer in hiragana - and this one does it. By using the pen, you highlight a word from the answer and "jump" to a lookup of that word. In the lookup menu, you will see the hiragana, and if thats not enough, you can actually look it up to check it is the right word you are looking for. It's a bit of a slow process, but unless you look at buying one of the super expensive dictionaries made for English speakers, it's about as good as is gets (for the moment).
Japanese to English
Input via the keyboard, in hiragana.
English to Japanese
As above. Most electronic dictionaries will go both ways, but it pays to be sure. Color screen: This isn't necessary but it's pretty cool that this model came with a better looking screen than more expensive models.
Now when you consider the cost of batteries vs the cost of a quality dictionary, this shouldn't come into the decision, but for some reason, I prefer rechargable to having to buy batteries. And this battery is, so far, pretty awesome.
So thats a pretty quick summary of the basic features you want to look for in an electronic Japanese-English dictionary. Shop around, and be sure to compare online prices too to get the best bargain.