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As rlauzon has said, moving from an lcd to an e-ink sceen will be the biggest difference for you. I have had both 6" and 5" readers and I did not find the loss of area that much of an issue.
I currently use a Sony 300 and do love its size and ergonomics. I noticed at the weekend that Waterstones is now offerring these at £99.
One consideration for you may be whether you have already acquired drm protected books. If you have drm protected epubs, the Kindle will not read these (unless you are in to drm stripping and re-formatting). The Sony reads drm epubs you may have purchased from WH Smiths, Waterstones etc.
Converting non-drm protected epubs to mobi for a Kindle is relatively painless with Calibre (though one may get the odd conversion error).
Were I coming to e-books for the first time, I confess I would probably go for the Kindle - I have been surprised at the breadth and relative cheapness of the UK Kindle book store compared to the epub stores I have been using, and it has the easier purchase and download to the e-reader functionality.
Withing your price bracket, I honestly would not look beyond the Sony and the Kindle in the UK. Just above your bracket is the Pocketbook 360, which gets very good reviews on this site for its design and firmware. I believe greenreader is the only UK site at which you can buy it, but stand to be corrected.
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