A small side by side comparison between Story HD and Kindle Wifi. I slapped both devices onto my stone age flatbet scanner and hit the scan button. Image was reduced in size afterwards, otherwise not modified in any way.
The Kindle display seems to be slightly lighter in color than the Story HD (both black and white). Other than that the displays are about the same quality. The Kindle had horrible Ghosting (had to reload the shown page 3-4 times to get rid of ghosting), but I assume this could be a firmware / configuration problem that the device doesn't reset the screen properly.
With large text such as shown in the sample picture, the Story HD's higher resolution isn't really visible to the naked eye. It's more pronounced when using smaller fonts or when working with images (manga).