I used an iPod Touch (with Stanza) for a long time as my only ebook reader, and loved it. No problems reading on the smaller screen at al, and it was so portablel. Then I decided to try a larger ereader, and ended up with a Sony PRS600. It was a nice device, but I found I rarely used it, just because the Touch was always with me, and it was backlit. The Sony also seemed to need charging a lot. When I got an Android phone, I started doing all my reading on that.
I thought hard about an iPad, but when I tried one in the store, I realized it was just too heavy for me to be comfortable reading on it.
Recently I started wondering whether reading on a backlit screen in the evening was causing my insomnia...and at the same time, I heard that Calibre can sync the last page read between the Kindle and other Kindle reading apps (like on my phone) even for books I didn't buy at Amazon, which is something I really wanted to do. I had a gift card, so ran right out and bought a Kindle 3 Wi-Fi.
I love the Kindle and use it constantly at home now. (I still use my phone outside of the house.) I can't get over how much better the resolution is than the PRS-600. It's also lighter and more ergonomic for me. I've been surprised to find that I haven't missed the touch screen at all, either.
But the real deal-clincher is that 'last page read' sync. Being able to read a book at home on the Kindle, then be out somewhere and pick up my phone and be on the exact same page where I left off on the Kindle is just wonderful. Being able to do that for books I didn't buy at Amazon (and converted to Mobi using Calibre) is amazing.
Did stopping use of the backlit screen at night help my insomnia? Not one bit. Oh, well, it was a good excuse....uh, I mean, reason...for buying the Kindle.
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