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Sorry to hear you had problems with the Kobo WiFi. I have a Kobo Touch (a bit more expensive) and I have nothing but positive things to say about it.
Sounds to me like you might want to research some cheap Android tablets. Your desire for a backlight = LCD screen, so it makes sense. Even the cheaper ones should do ok for ePub. I'd make sure they work ok with Adobe Digital Editions though as you're a library fan. (IE, that ADE will export the ePubs ok.)
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