The battery is suppose to last for two weeks or more without recharging, although I've never went for more than that without recharging. I've never had the problem described on board where battery drains overnight. (Seems like it's a defective reader.) Mine held for as long as two weeks and at times I left it on standby overnight.
I never annotated text or used the highlighting, so I can't comment on the annotating capability. Maybe these links will help.
User guide:
http://docs.sony.com/release/PRS650.pdf
Shortcuts
http://blog.the-ebook-reader.com/201...Reader+Blog%29
You could try it out on display Readers at Best Buy or Borders.
I have used the Reader to jot down little notes and such, and it's ok. The performance can be a little laggy (about as fast as or faster than Kindle's cursor movement). Obviously it's not as fast as operations on a smartphone or ipad. If you're needing to take copious amount of notes you may find it too cumbersome to do it on a reader. YMMV.
Interesting video on note taking
http://www.youtube.com/watch?v=-q9Q_7_mjrg