I've never tried the Iliad--but I think most of which is "better" depends on what you want to do with it. The Cybook is great for pleasure reading--it's small size, light weight, and battery life make it ideal for travel.
I can see the advantages to of the Iliad--especially for pdf support and for annotating what you're reading--but I can't help but think by the time you're doing that, maybe a tablet pc would be better *shrug.* You'd be adding yet more weight and a harder-on-the-eyes screen, but it seems maybe at that point it would be more of an advantage to have the full versatility of a computer, as well as a keyboard and a color screen
