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I'm waiting till it hits Australia so I can do the bricks 'n' mortar thing, and check the device in-store as well as having local warranty return.
Check out the Kobo Developers' Forum for the sorts of things people are doing with the open firmware. PDF reading isn't great on the factory firmware, but there are alternative readers such as Koreader that require no jailbreak. You can also customise font/page display to your hearts' content, unlike the Kindle, and you can set up and manage your collections with Calibre.
Kobo's IR touch works just fine for page turns and menu navigation, if you keep your bezel crannies clean; can be a touch tricksy if you are doing lots of annotations and footnotes. (There is a possible fix for the small footnote target, that involves editing your book.)
No apparent disadvantages to larger screen except heavier/larger device.
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