I agree that their prices are too high. The convenience just isn't worth the loss of fair-use (lending out your book, for one) and ability to sell (or donate) your books when you're done reading them.
Regardless of what you think of Sony, I think having the Sony Reader in a brick & mortar bookstore chain like Borders will be good news for e-books, but more importantly, E-Ink technology. Once readers see first-hand how good the E-Ink displays are, they'll want one for the readability and convenience. The pricing of titles in Sony's e-book ecosystem will be tough to swallow for all but the die-hard e-book enthusiasts with money to burn.
This could be good news for E-Ink as well as iRex and their distribution & content partners: Free advertising for the technology while learning from Sony. Based on iRex's relationships and testing with large newspapers combined with
The New York Times starting to embrace new technology and the web, I'm hopeful that subscription models will help subsidize the hardware costs of the iRex Iliad. I also think
this photo of the Iliad displaying the
NYT is not a coincidence. The
New York Times Company has quite an extensive network including TV & radio stations and 35 websites in addition to publishing The New York Times, The International Herald Tribune, The Boston Globe and 15 other daily newspapers. Using the iRex Iliad's wireless capabilities, it isn't too hard to imagine a personalized daily newspaper getting delivered automatically to your device every morning.
Sony might be first out of the gate in "E-Reading 2.0", but they won't have first-mover advantage when they haven't learned from their past mistakes which include overly restrictive DRM, BBeB which will be yet another
failed proprietary format, and high prices.