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No, they do not show ads while you read. The kindles can come with special offers which are on the sleep screen and the bottom of the home page but not in the books themselves.
As far as the build goes they are pretty much identical.
Where are you planning to get your books from?
Are you planning to convert?
Most places like project Gutenberg and Smashwords typically offer a choice of formats. So does the library here on Mobileread.
Kobo is the only one that is waterproof at the moment.
Do you want a lighted one or a non-lighted one?
I have both a kindle and a Kobo.
I prefer the Amazon store to Kobo.
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