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I have a 505 (which I've lent to my husband), and I've upgraded to a PRS-350 and a PRS-T1. I think that you will likely enjoy the added functionality of the touch screen, ability to change fonts, wi-fi and added contrast of the T1, as well as the ability to download library books directly to the device through OverDrive. You also won't have to convert your existing ebooks, also a big plus.
The Kobo Touch seems like a great device as well, from what I've seen by playing around with my best friend's KT. I love that you can add your own fonts. I don't own one, however, so I can't comment any further on the KT.
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