I have and use both a Kindle3 and a Sony 350, and I too think it's mostly a matter of personal taste.
I like them both, but prefer the K3 in more/weightier ways than I prefer the Sony 350... if that makes sense.
Off the top of my head:
On the Sony + side:
1. The size is better for my smaller purses.
2. I like the handling of collections better. (No ereader does that really well, yet.)
3. The touch screen ...I have a love/hate relationship with. It's better for some things, and not as great for others.
I
love being able to scan through pages quickly using the "slide and hold" move, and the ability to select things by pointing to them.
I have no problem with smudges on the screen.
4. There is a broader choice of dictionaries, easily swappable.
5. I prefer epub to mobi as a format, but just from a developer perspective.
6. It is a zillion times better at reading pdf than the Kindle3 is.
On the Kindle + side:
1. Text to Speech (TTS) - I find it to be invaluable when I'm driving, cooking, or resting my eyes. This is the #1 consideration for me.
2. Amazon store. 99% of the time, the prices and selection are best for what I want. (I've also used Baen and Ellora for those that weren't, but since they also sell .mobi for Kindles, it wasn't an issue, and soon, neither will be libraries.)
I also love the whole Amazon environment - shopping, integration, recommendations, and ease of sharing books between devices on the account.
3. Wireless. I can email my ebooks, auto-deliver my instapapers, subscriptions, anything... straight to my kindle, or to anyone in my family's Kindle, with just a few clicks.
4. The Fonts are much better than the one on the Sony, with options of type, margins, spacing, and many more size choices.
5. I find the K3 to be easier to hold and turn pages with one hand. It's just more comfortable. I don't like the placement or feel of the page turn buttons on the Sony, and in some positions, having to use a finger to swipe puts the sony off-balance.
6. Surprisingly, I find highlighting to be easier on the Kindle. It's quicker to get to that place on the Sony, if it's in the center of the page, but once I'm at the word I want to start on, highlighting the selection is easier/more controllable on the Kindle.
7. The ability to highlight a person, place, or thing, and click to wikipedia or google it.
(I don't use the ability to highlight and send to facebook or twitter, but my son loves it.)
Anyway, those are the things I personally feel, but what I need or use might not be the same as what you need or use, so take this as just a list of things for you to consider to be more or less important for yourself.
Since you're weighing the pros and cons ahead of time, I'm sure you'll be happy with whichever you choose.
