So, thanks to all of y'all on this forum I have it narrowed down to 2 choices: Nook Color or the PocketBook IQ 701.
Currently I read on my iTouch and I do a lot of reading in the dark, so I do want an LCD reader.
The most important requirement is that the new reader be able to download library ebooks from Overdrive (Adobe DRM, yes?), and as far as I know my ipod can't. I am tired of paying for books!
I like the idea that the PocketBook is not locked and that I can access a Kindle app too, as I have a lot of Kindle books. But the Nook sounds like it has a better touch screen.
I am interested in being able to browse the internet easily as well, if possible.
The weight may or may not be a factor. I often read in bed while getting my babe to sleep, so I am often one-handed.
As the difference is $100 I am willing to buy either one. And it's my birthday Tuesday so I can get whichever I want!

What would you buy?
Feel free to mention another if you feel it's a better fit.
Thanks for your help!