Sony Reader now available for pre-order from WaterStones. But, also worth considering is the Hanlin V3 and Cybook, both available from e-readers in the UK.
The Sony Reader appears to be the cheapest available, but you'll need to convert any documents into their proprietary format. Which isn't that big an issue so long as you keep a copy of the original for future conversion.
The Hanlin v3 (lBook) supports the widest range of formats and uses a standard Nokia phone battery (user replaceable). I don't understand why devices are still sold without the ability for the user to replace a faulty battery. Not sure if the Sony supports that? But for me, it's a big plus point.
Downside to the Hanlin is that it's £50 over your planned budget. The Cybook standard comes in at the same price, but the Deluxe would be further outside out of your budget.
From all the research I did prior to buying the Hanlin, the Sony didn't sound a bad alternative. It wasn't available in the UK at the time though, so I didn't consider it too much and would have had to check into whether the battery could be replaced or not.
The main thing that put me off the Sony, is their proprietary format which is the only format you could buy books in from the Sony store. The risk of the store closing down and losing the ability to activate books on a future device was off putting.
If you're happy enough to convert books (country laws applying) between format though, then the Sony reader is quite an attractive option. Buy Mobi or .lit books and covert them to html then onto the readers proprietary format.
If you'd be against converting books for any reason, then I'd probably advise against the Sony & Hanlin, and suggest the Cybook. This supports MobiPocket format, which is widely available. As of the latest firmware update, the Hanlin does support .lit, but I don't believe the viewer is up to standards yet for that format.
Compared to a PDA though, I'm sure whichever device you decide to get you'll be very happy with the purchase. The display is crisp and clean even in direct sunlight which would have made a PDA display an unreadable mess.