Yeah, I gotta agree. The H2O satisfies all your requirements, including the Preferences. I've had one for a couple of months now and absolutely love it.
If cost is a factor, you might look at the new Kobo Glo HD. It doesn't have expandable storage or a larger screen, but it satisfies all other requirements. And it's $50CDN less then the H2O. ($129.99 vs $179.99.)
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