I really do love Baen - unencrypted files, any and all formats you could possibly want, and most books are $6 or less. And they do other nice stuff like selling a group of books together as a package every month for $15 (looks like 6+ each month?), so you can test out other authors, un-edited advanced reader copies available months before the book is published, etc.
In additional, you can find copies of many of the cds that are released with hardcover copies of their books online:
http://baencd.thefifthimperium.com/
These cds generally contain all of the previous books in the series, other random books from that author, etc., and its all completely legal - the cds happily say to share with your friends, copy, etc. Obviously, if you like the books, they won't turn you away if you want to pay for a copy - but a book that was published 10 years ago isn't likely to make them all that much money directly, but if it gets you interested in the series or author, that is more money for them down the line.
Now, back on to the subject of the thread
I too am mildly annoyed at the shifts in prices, and the new Kindle3, but... I guess I knew this was going to happen - maybe not *quite* so soon after I purchased my kobo, I thought there might be some price stability until the Christmas shopping season started. But I've been waiting to buy an eReader for quite a while, and the $150 price point (well, ~$130 really, after borders bucks and the gift-card) was finally low enough for me to purchase.
Like comments in previously threads, I like the Kobo because of its simplicity - I wouldn't mind a bit more in terms of the software, but hardware wise I couldn't be happier. As far as the Kindle3, I'm still not convinced that I'll get one, certainly not right away. More likely I'll wait and see what happens with the Kobo firmware, and where prices are a couple of months from now.