I've seen the ereaders around for 199-299 (USD) while on holiday in Vegas. The guy at the shop said I wouldn't be able to get books in Australia for it.
Is this true? Doesn't seem much point if I can't get the books.

Most Sony readers support ePub now (I believe the PRS-500 still doesn't unless you send it off to Sony for an upgrade). That means you can buy books from a large number of sellers including Books on Board, Fictionwise, Powell's, Waterstones, WHSmith and ReadWithoutPaper.com. You can also download public domain books from MobileRead, Google Books and a bunch of other sites I can't think of right now.

I've seen the ereaders around for 199-299 (USD) while on holiday in Vegas. The guy at the shop said I wouldn't be able to get books in Australia for it.
Is this true? Doesn't seem much point if I can't get the books.

You won't be able to purchase from the Sony Store itself, but as Robbie says, there are many other locations that you can get books for it - My "Where to obtain eBooks for your Reader" (http://ebookreaderguide.co.uk/where-to-obtain-ebooks-for-your-reader-83.html) post has a number of locations (and comments about them) to get you started - while a number are UK focused, the majority will be useful where ever you're located.