Welcome to MobileRead.
The Iliad is quite good with PDFs. We're still waiting on decent PDF support for the Sony Reader. It does not suit your purposes at the moment. Instead, you should look at the Cybook. Same size, much better at displaying PDFs.
That said, I would recommend a tablet convertible, because it can do so much more than the Iliad or the Cybook. And also because a tablet running Windows can open DRMed PDFs, and neither the Iliad or the Cybook can.
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