Really the only thing needed is an e-reader (and a USB cable to connect to it). For this project, a Kindle was donated to me by a friend. It is a Kindle 3 WiFi (nicknamed K3, or K3W). You will find many second-hand earlier models like that on eBay for instance.
You’ll need a computer (any operating system), with an SSH client like vSSH and an sFTP client like Filezilla installed (both are free). It helps to have a bit of experience with Linux, because that is what the Kindle runs on… More here.
You will need a LOT of time to make this.