I think you have to assume that nothing more will be done software-wise to the iLiad. If it is good enough "as is" then any advances will be a nice bonus, and you won't be disappointed if the new features you want don't come to pass.
I have a Kindle and an iLiad, and I use the iLiad around the house and for reading in bed. Its larger size makes all the difference over the Kindle, and the relatively short battery life isn't a factor since it can be charged easily (you can't really read while charging though). I use FBReader almost exclusively, which means DRM-free (or deDRMed) ebooks only. This is highly customizable for the page appearance you want, but page turns are slow. You won't need the WiFi, which I have found almost useless, so go for the Book Edition.
The Sony PRS-505 would also be a good choice, a 6" screen is acceptable for reading novels and the smaller size and long battery life is helpful when travelling.
There is no difference in screen quality between the Kindle and the iLiad, and my iLiad has the older EInk film (new ones come with Vizplex, like the PRS-505 and Kindle). Sixteen grey scales can make a difference some times, but 8 on the PRS-505 is probably enough.
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