I did it. I traded in my 505 and got the 650. With tax and the purchase of the lighted cover the price ended up being $229 (same price of the reader alone without the trade-in), so it's basically like I got the lighted cover for free. They only had red and black readers and I bought the black one (they had a silver demo but no silver readers).
I asked what would happen to the 505 and was told that it would be used for parts and anything not usable would be recycled. That made me a little sad because it was fully functioning with no problems.
BTW, if anyone lives near the SonyStyle store in Costa Mesa, CA, they were selling the 650 demos for $137 but the trade-in did not apply.
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