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Web Browsing works, but is limited. I can get to most news sites just fine. I can even browse & post to many forums. Facebook's real site mostly works as well as eBay.
Downsides are sometimes you can't resize the fonts (site dependent), it doesn't appear to let you get into landscape mode (portrait only) and you cannot download anything from the web to the device. Also, only works on Wifi. I personally wish Sony would let you do light browsing over 3G, heck even for a small fee... but that's not really a huge issue.
--Chris
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