Thanks for the detailed responses everyone, I really like this community!!
After playing with the Sony Touch the other night, I've decided that's what I'm going to get. Once I got home I realised I should have had a play with the pocket as well, because I like the thought of a smaller reader (as I'm likely to have it in my handbag constantly, less weight and space is always good).
Just wondering if the smaller screen is toooo small, but considering I currently use my iPhone to read books (and have done so for about a year), I don't think it will be a problem. Will play with it a bit more when I next head in to the city (I live ages away from civilised shops that sell ereaders!) Just have to choose a colour - I'm presuming the lighted covers are available for the pocket too?
Oh, and the only other consideration for the pocket vs the touch seems to be the lack of SD card, but as has been pointed out, 2GB is a lot of space, so I think I'll be fine.