Sony has just discontinued the PRS-700 and appears to be drawing down stocks of the PRS-505, see
Sony Removed PRS-700 AND 505 !. So probably they will soon be introducing new models, and there have been rumors of "wireless" on an upcoming Sony Reader.
The Kindle 2 is a good choice if you don't expect too much from its web browser. I can't recommend the PRS-505 today, because its replacement from Sony is likely to be significantly better.