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I own both a Kindle 1 and a Sony 505. I prefer reading on the Kindle. The two cases where the Sony wins out is reading at night using the cover with the integrated lightwedge and reading ePub books. (I'm too lazy to do the format shifting unless it's necessary.)
Things I prefer about the Kindle:
* Easy reading. I find the page-turn buttons on the Sony to be stiff.
* The way it feels in my hand. Probably somewhat related to the above point. (Note that I always read with the cover attached.)
* Samples on the reader. Amazon sends samples to the Kindle and at the end of the sample is a "buy now" link which I can use if I've enjoyed reading the sample.
* Highlighting and notes. I use this feature a LOT. The Kindle copies the highlighted text and my notes into a text file which I can transfer to my PC. This makes it really easy to get quotes for reviews.
* Instant gratification. I like being able to purchase and receive the new books via wireless and have used it on a train from NYC to DC as well as in an airport when using my PC wasn't an option.
I'm perfectly happy downloading books via the PC and transferring to the reader with a USB cable -- and in fact I keep my "inventory" on a portable hard drive rather than on the reader. Yes, I know I mentioned the wireless as a feature, but I could live without it as long as the reader met my other needs.
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