The most obvious alternative to the Sony Reader is the Bookeen Cybook, which supports MobiPocket for DRM-infested "secure" (encrypted) e-books. Mobipocket is supported on a wide range of devices. The only downside of buying now is that hands-on reviews are limited, but so far the device looks very good.
An alternative strategy is to buy e-books in .LIT (MS Reader) format, break the DRM (e.g. with ConvertLIT) and convert to Sony or MobiPocket format. That way you are not bound to any single format/device. Note that it is also possible to break MobiPocket's encryption, although the software to do so isn't widely available, so even if you go the Cybook and MobiPocket route you are not tied to MobiPocket compatible devices in the future.
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