See, now I'm really torn.
Pros: ability to use a wide variety of formats (too bad it doesn't read unconverted LITs), reasonable price, small size, integrated screen cover, doesn't require the use of crappy Sony software.
Cons: funky software, designed for Chinese instead of English-speaking user base, cheap, shiny plastic, unknown future.
The Sony Reader looks like a great device, but I'm willing to bet they'll hamstring it by requiring users to use the Sony Connect software (which will also leave out OSX users). The fact that it uses SD cards is a huge plus, and I'm amazed that Sony would support anything other than MemorySticks.
If the iLiad was a little smaller and a little more polished (and about half the price) then I wouldn't give it a second thought.
I might have to wait until the second generation units come out.
The perfect situation would be if I could get a V8 (or V2) with a finished, native-English UI.