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I've noticed that many libraries are moving away from Overdrive (which supported the Kindle) to Axis360 or 3M, neither of which support the Kindle. That might be worth taking into consideration during your decision making process.
Kobo readers are enjoyed by many, and they support Library lending.
The Onyx T68 that everybody is talking about the last few weeks can run many apps, some of which support Library Lending.
If you want the least fuss I'd recommend any one of the current Kobo models, depending on which one appeals to you the most.
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