Does the reader still process touch events if it is in the "half" off mode with the screensaver image on? If this is a charge issue and it's simply misstating the charge level, then I don't think I've ever had a device this bad in displaying charge level, and would venture to say that the device itself is defective.
I'm finding that I have to charge this thing as often as I do my blackberry, and the phone is on all the time...
And I guess I wasn't unreasonable in thinking the worst about calling Sony. I'd probably just sell it than try to get a replacement.
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