I think -- from the press release and website -- the Kobo wifi is the right step forward and can be recommended.
Kobo wifi - direct download to device of books bought; access to your library; syncing to bookmarks of your account with other devices (read on Blackberry, pick-up where you left off on the Kobo wifi); inline dictionary; onscreen keyboard for wifi access (passwords); a sharper screen; ePub access; library book access; expandable storage via SD card; kobobooks bookstore with localised content; fits into a family of devices including colour e-reader Literati, Blackberry app, Playbook, iPhone app, iPad, Android app, Samsung Tab, PC and Mac. All for $139.
Kindle 3 wifi - great bookstore, user experience in Amazon; Pearl screen; more developed social networking; web browser; text-to-speech; multi-platform use; direct download of books bought. All for $139.
Kindle 3 is arguably a superior device: but it still lacks ePub support, library support, access to books not in Kindle format. If that matters -- and it down to some people, Kobo wifi brings lots to the table.
Nook offers wifi and a web browser and ePub support; but then it is only sold in the US. All for $139.
Sony does not believe in connected devices; its PRS-950 will be sold only in the US and at $299. It's competitive 6" model is $249 in Canada and offers a touch screen ... for $100 more.
Kobo wifi has taken steps in the right direction -- as they have the multitude of product enhancements in the past month. This is a credible alternative and sets up the Q4 selling season quite well. Let's hope they can handle the volume -- it's a bad time of year to run out of stock!