Don't have a wifi kobo but I do have the original, and a PRS650.
Essentially the Wifi Kobo gives you a slightly faster experience than the original, wifi which only works with the kobo store, a dictionary which only works for kobo formatted books, and a no frills UI, for a reasonably low price. You also get a fair bit more support by kobo employees on these forums...
For the extra money, the 650 will give you a greatly improved pearl e-ink screen, really solid metal construction, an excellent touchscreen experience, proper well implemented dictionary support, better PDF support, decent note taking, real bookmarking and navigation features, much much snappier operation, and (IMO) a vastly superior UI. Personally I couldn't care less about wifi, but YMMV on that one.
Both could still do with some improvements, but in my experience the Sony is the superior ebook experience, as it bloody should be for the extra $.
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