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Sounds like you probably want some kind of Sony. They do Adobe DRM-ed ePubs and PDFs with no problem, and there are touchscreen models available. Looking at the MR wiki, the PRS-600 does notes and highlights, which you can apparently take with a stylus and handwrite, too, though I'm not familiar enough with Sonys to know if your notes can be exported for other use.
The nook, as far as I know, does not currently let you copy your annotations (this may be planned for a future upgrade, though, since it's been requested a couple of times at B&N's forums).
Some readers like the Kobo (library support, but very basic reader and no search/annotation functions yet) do show pages, but they're simulated pages rather than ones corresponding to any paper format, and from what I've heard, they change depending on the font-size you're using. However, a lot of people like the effect.
As for the Kindle and libraries, it is possible to get them to work together. However, there's a certain amount of hoop-jumping involved, because in order to use ePub and PDF library books, you'll need to strip the DRM and convert if necessary, which may or may not be legal in your locale.
Mobipocket books you can use with the help of a perfectly legal non-DRM-breaking python script which just tricks your Kindle into thinking the library's regular copy-protected Mobi file is okay to read upon it, but Mobi format library books are increasingly rare.
Edit: Whee! 200 posts!
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