Oh eek. I just typed a detailed reply, then the forum kicked me out and made me sign in and I lost it all, grr!
Thankyou all so much for your detailed responses, I really appreciate it.
I didn't realise that the epub conversion is such a grey area - I just assumed that it was something that could be/had to be done in order to read existing epub ebooks.
I like everything else to do with the Kindle, but because of this I'm going to look at the other reader at the top of my list, the Sony Touch. The main things that I prefer in the Kindle is the 3G and the cost. But when traveling, I can normally find wifi somewhere along the line, so 3G isn't too much of a concern, and what's $100 when you're getting what you want
I'm heading to a store tonight where I should be able to see one on display, so hopefully I should be able to get a feel for it.
BTW - any Aussies out there, Choice has just released a review of ebook readers in Australia. Their top 4 were the Sony Touch (81%), the iPad (78%), the Sony Pocket (76%) and the Kindle 3 (73%) (they score based on ease of use, readability indoors, outdoors and in the bedroom).