I don't know how many books/fics the Kindle Touch can hold, but my estimate would be "a fuckton." It's not so good with PDF files, since there's no easy way to resize them on the screen, but I've had good luck with .mobi files, and they hardly take up any space at all. The collected works of Shakespeare takes up all of 5,673 kb. Secret Vulcan Mating Rituals, which is just shy of 300K words, takes up 988 kb as a .mobi file downloaded from AO3.

Bottom line: I'm very, very happy with my Kindle, both for books and fic.