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My only disagreement with shanghaichica's posting would be, I personally use the Sony Reader software as I found Calibre to be complicated.
With the Sony software, when you buy a book from WhSmith or Waterstones it is simply a matter of downloading the small link file which automatically opens in the Sony Reader software, it then downloads the content for you. You can then set various collections to automatically sync.
With ADE you have to drag and drop onto the PRS.
My other comment would be on the screen size, I bought a Nook which has a 6" screen and whilst not as portable as the Sony it means less page turning and more words per page.
I have also ordered a Kindle 3 as I think the combination of the screen plus Amazon's network will be great.
p.s. two riders to the above, I use the Mac versions of Sony Reader and ADE which may differ from PC
The Sony is pocketable and handy just to have around, but looks increasingly expensive against the Kindle
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