Overall I'm happy with the Kobo Touch, my first eReader. I voted for the "firmware update(s)" option though.
I've had a couple issues that seem software-related (they happened with both units I've had, anyway). A couple freezes, and more worryingly I've had the touch screen become completely unresponsive after powering up/waking from sleep but the home button still works. Neither of these flaws make me feel warm and fuzzy about my purchase, but I admit that both issues are fixable with a quick reboot so I can live with them for now.
The software feels a bit unfinished to me, so I'm hoping it gets better with a few firmware updates. I won't go into specifics as I've shared most of my thoughts on this matter in the firmware updates thread.
I will say that if I had known about the upcoming Sony T1 at the time of purchase, I may have waited a bit longer to buy. For now though I'm pretty invested in the Kobo Touch (bought the protection plan and a case) so I guess I will stick it out.