I started with a Kobo 1 last July, which had a good eight months' service before the screen fudged up by itself. It got replaced under warranty with a Kobo 2, which served me well for six months before that screen stuffed up. It got replaced under warranty with a refurbed 2, which I sold (it ended up more than covering the costs of my Kobo Touch).
I now have a Touch which had one storage error (funnily enough, on the same day the 1.9.10 update with the fix came out). Otherwise, I'm very happy with it, particularly since I've had one of each model without paying any more than I did for the original Kobo!
And even though I've had issues with each version of the Kobo, I'm more than happy to stay with their products. Whenever I've needed their tech support, it's been absolutely stellar. They seem responsive to feature requests, and they've built quite a great 'third option' device.