I have a 505 bought and sent over by a friend in the US.
I deided to write the warranty off and take the risk, so far it has been well worth it! The device is great in every way.
Regarding the connect store - this is not an issue for me as I do not buy by books from there. I buy my books from elsewhere and convert them to the LRF format with Kovids fantastic tool (libprs500). This way my books are DRM free and I will always be able to read them (I make sure I keep the original source files for future alternative conversion)
I did a lot of research into converting to LRF before making my choice - I daresay that if it wasn't for Kovids tool, which makes very good LRF files quite easily (assuming you have decent source files in the first place), I may have been tempted to go with the Gen 3 instead.
But I personaly think the Sony looks and is built better than the Gen 3.
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