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When you sync a book with the Sony Reader program on your PC(or Mac?), you can then press a little button in the right hand corner of the screen that exports all notes and highlighted portions to an RTF file (readable with Word or other word processors).
The big sticking point is that it seems that only the first 100 characters of highlighted portions of text can be exported.* This makes the PRS T1 a bit of a dodgy proposition for any sustained academic reading in my book, although I have liked some of its other features. There may be hope with the work that people are doing to get the T1 to play well with Calibre, but I'm new to this whole business and with luck someone else will be able to shed better light on things.
*This is apparently an artificial restriction introduced to prevent wholesale copying of books, which strikes me as fairly absurd.
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