Since early December, I had been researching e-book readers to purchase, and like many others, my choice came down to the Amazon Kindle or the Sony Reader.

The decision was tough, and it took me well over a month to make a decision. I had certain criteria that had to be met, but I knew that I would have to compromise in the end.
The first thing I looked at was the availability of content, and at first glance, the kindle was in the lead. As well as having a larger selection of books to purchase, it also offered newspapers, magazines, and blogs, many of which I enjoyed reading. Even though the sony e-book store was lacking in selections, the e-book reader itself was able to support a variety of different formats, meaning that I didn't need to rely on the sony store to purchase my books, allowing me to purchase elsewhere and simply convert (which I have now found to be a pain) the books into the appropriate format and send them for free (Kindle charges 10 cents to transfer documents) to my e-book reader. In the end, due to sony's ability to support multiple formats, availability of content became a tie for both.
The next thing I was looking at was battery life. The Kindle was reported to last for a full week if the wireless was turned off (but it would need to be on in order for you to receive newspapers, magazines, and blogs that you subscribe to) and 2 days if the wireless was kept on. The sony reader was reported to last for 2-3 weeks, which was a major plus. Further research discovered that battery life depended on how often and how much you used it (

duh). The Kindle was reported to last for ~30 hours of continuous use, where as the Sony reader would last for up to 7,500 continuous page turns. A little bit of quick math (and a little guess work) put the Sony reader on top for batter life.
The third thing would be how many books I could take with me. I know I really don't need to carry a whole library around with me, but the ability to be able to reference books whenever you needed to and the ability to choose what book you wanted to read was a major plus. Both the Kindle and the Sony model had about the same amount of internal memory ( 180mb for the Kindle and 192mb for the Sony model). They also both supported expandable memory, which meant that you could literally carry thousands of books with you wherever you went. Kindle supports 2gb SD and the Sony model supports 2gb SD
and 4gb of Pro Duo. Even though they both should be even in this department, I gave Sony a plus since I already owned a 2gb Pro Duo that was simply collecting dust (upgraded to 4gb on my digital camera).
The fourth thing I was looking for was design and functionality. Both were reported to have an easy user interface and well placed buttons for turning pages. A plus for both. But the kindle only came in one color, and the design didn't look so great either. I know you shouldn't just a book by it's cover, but the kindle really looked like an ugly unit to be carrying around with you and pulling out at the bus stop. The Sony reader was sleeker and came in 3 different colors, which was definitely a plus. There were also 2 different models to choose from for Sony. The PRS-505, which was the basic model for $300, or the PRS-700, which was touch screen and came with its own attached light, but for an whopping $400.
In the end, even though the Kindle offered complete wireless freedom and a wider selection of books at its own store, i chose to purchase the Sony PRS-505 (couldn't justify spending the extra hundred for a touchscreen and a flashlight).
I've had the PRS-505 for a couple of weeks now and have enjoyed using it. I was even able to convert and transfer my small collection of .lit e-books to my PRS-505 as well (even though some of them didn't format correctly. Still haven't figured that out)
The only problem is, Kindle 2 is now available. With all my research, I didn't notice that there was another model on it's way. If I would've known, I would've waited another month before ordering, just so that I could see what the new one was like.
Even though they dropped the expandable memory, it now boasts that it can hold ~1,500 books on its internal memory and has a 16 level gray scale, compared to the 4 level that the first had, and a longer battery life!
Now I feel as if I made a bad decision in picking up the PRS-505 over the Kindle. And mostly because of this comment on the Amazon page -
"At Amazon, we've always been obsessed with having every book ever printed, and we know that even the best reading device would be useless without a massive selection of books. Today, the Kindle Store has more than 230,000 books available, plus top newspapers, magazines, and blogs. This is just the beginning. Our vision is to have every book ever printed, in any language, all available in under 60 seconds on Kindle. We won't stop until we get there."
....
Sony hasn't made that kind of a promise or proposal, and they never will.
After a day of panicking and self-pity, I realized that not all was lost (Lost is an amazing show by the way... sorry, off topic). I was still able to purchase e-books from different online stores, and maybe one day sony will decide to add more content as well. But until that day comes, I think I will be satisfied with my PRS-505 (even though I would love to have the Kindle 2) because it does what it is meant to do and it supports multiple formats. And besides, I can always purchase the Kindle 2 with my tax returns if I want and gift my PRS-505 to my mother, who has been wanting to borrow it when she goes on trips.