My wife had ordered me a 700 just the other day for my BDay. After seeing this post, I cancelled my order. There were a few deciding factors I had, so it wasn't just the contrast I see in the pictures. I was actually thinking of cancelling the order before I read this post, based on other things I've researched. Instead, I have ordered the 505, the lightwedge light for it and the extra AC adapter, as well as the 2 year warranty - with the special bundle pricing I saved $40 and the price of all this was about the same as just ordering the 700 alone. It made more sense for me.
My reasons for choosing the 505 instead:
1. Contrast of screen - not just from the pictures in this post, but verified by others who have posted elsewhere. I really want the best screen I can get. Since I've never owned an e-ink reader before, I might not have noticed this much, but this leads to my other reasons...
2. Touchscreen - I don't really want this feature, and I know its popular with some of the folks here. I'm one of those that are kind of anal about my screen being clean.

3. 505 Design vs 700 Design - I kind of like the page turning buttons and all the buttons on the 505.
4. The Red 505 - I think the red ebook reader is so cool looking.
5. More accessories due to price - I was able to get the AC adapter, the lightwedge w/cover and a 2 year with accidental damage support plan for pretty much the same price as the 700 all on its own.
There are a few things I'm sad about losing on the 700. Number one would be the page-turn performance they say is so fast in the 700 compared to the 550. The extra built-in memory is also sad to lose. Last but not least, the built-in light. I do alot of reading in bed. I'm hoping the lightwedge with cover is almost as good.
So I've got a few questions about the 505. Will I have to get the latest firmware for it or will it come with the new device? I see some cool hacks to add features to the 505 on the site here, are they safe to use? Will they void warranty or anything? I'm so excited about my first e-ink reader.