The Kindle does show pictures, they're obviously black & white since it's not a color device. You can also make notes on a page.
As for the "where" something is, it may not be exactly what you're looking for but there is a scale at the bottom of the page so you always have a feel for "where" in the book you are. One oddity is there is no concept of page numbers, which makes sense when you realize that you can change the font size which changes pagination.
If you know someone who has one, check it out. Not sure if they still do, but Amazon used to allow people to join a list on the Amazon site for people nearby who wanted to check one out.