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The Kindle supports
Kindle (AZW)
TXT
PDF
Audible (Audible Enhanced (AA, AAX))
MP3
unprotected MOBI
PRC natively
HTML
DOC
JPEG
GIF
PNG
BMP through conversion.
Your best bet is to go to Best Buy and see what reader you feel most comfortable with.
If you are comfortable technilogically and ethically with stripping DRM and converting documents the format that a bookstore sells is not a problem.
I have had a Kindle for 2 1/2 years and have not had to leave Amazon's bookstore so the format has not been an issue for me. There are Nook and Sony owners who have picked up a Kindle or downloaded a Kindle App because they can find the books that they want at Amazon but not at the stores that sell EPub and they did not feel comfortable stripping DRM in order to put books from Amazon on their device.
Check the bookstores and see which bookstores sell the books that you want. Compare the stores by picking 20 titles that you want to read or have in paperback and might want to read again and see what store has the most books. Sony can read non-DRMed EPub and books from the Kobo bookstore. Amazon can read non-DRMed Mobi and books from Amazon.
You are going to have to balance your desire for a touchscreen with your desire for 3G connectivity and price.
Sony 950
6 inch screen
Touchscreen
3G
More expensive then the 650 or Kindle.
Sony 650
6 inch screen
Touchscreen
No wireless connectivity
More expensive then the Kindle.
Kindle 3
6 inch screen
No touchscreen
3G/WiFI or WiFi only connectivity
Less expensive than the Sony 950 and 650
Sony 350
Touchscreen (I know the 300 did not but I think the 350 does)
5 inch screen
No wireless connectivity
Priced less then Kindle 3G/Wifi but higher then the Kindle WiFi.
I have a feeling that you will be happy with either device. Go to Best Buy and hold them and play with them. Check the bookstores. You can't really go wrong.
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