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Kindle 3 has better browser due to Article Mode
Kindle 3 browser has this option to stip away the ads etc. from a page and show the text which is very helpful.
Lets you turn a blog post into a book chapter of sorts.
Apart from that they are both good. Kindle 3 does have better screen contrast but it's not, in my opinion, as important as Article Mode which is like having Readability on your eReader.
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