As a new Sony PRS-505 owner, I was coming to the conclusion that the Kindle 2 was a better device and recommending it. It offers enough additional valuable features (not even including Whispernet and the Amazon bookstore), and Calibre now supports mobi. The Sony only had a few things still going for it: size, ADE support, metal construction, card slots, price.
This changes everything.
JSWolf said it succinctly: Amazon owns your *ss.