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You have to register the Kindle if you want to use Collections. It is simple enough, you turn on the WiFi, enter your Amazon account user name and password. Once the Kindle is registered, you can chose to never turn the WiFi on again. I think that collections will work if you build them before you deregister the device.
You have to be registered to use the WiFi and hence the browser.
You can side load PDFs on the Kindle easily enough and they can be placed in the collections. You will have a great deal more space on a Kindle Touch then you will on the Kindle Lite. I have have a K3 and a DXG for quite some time now and have yet to reach 1/2 of my capacity. I don't see the need for more space, but that is me.
The Kindle does have a web browser that works with the WiFi. It works best when you use mobile sites and operates ok. It is not great but it is not bad.
You will have to convert any book that is not in Mobi to Mobi to be able to place it on the Kindle. It is easy enough to do, google Apprentice Alf for help.
The Kindle has text to speech, which some folks find great, and an audio player on it.
Neither are going to be very good for PDFs. PDFs are meant for a larger screen and just look really small on the 6 inch screen.
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