I have the Sony PRS-505 ands its actually very good. It has few limitations with the stock operating system which for the most part go away with an unoffical upgrade

. It supports PDF, TXT, RTF, DOC, LRF, LRX, ePub, JPG, GIF, PNG, BMP, MP3, AAC w/o DRM and it can take sony memory sticks up to 8 GB or SDHC cards up to 32GB. You can listen to music and read at the same time.
It uses e-ink like the kindle and the batteries last a very long time. The only downside is that it can be very hard to read in dim light but Sony sells a light that works very well with the PRS-505.
The PRS-700 is the newest version and it has faster page turns and a touch screen. But it sounds like its a bitch on because of the glare of the touch screen.
I use to read on my palm pilot but the Sony ereader is leaps and bounds better than any lcd screen.