Okay, I just got back from the Sony Style store, and was able to demo my extremely recent epub purchase out on it, as well as a plethora of PDF's.
I was pretty impressed with what I saw. The PDF's actually looked really nice! Nice...but most were a bit on the smallish side. Depending on the document and your eyesight, I can see things being too small for comfort over an extended reading session. Some PDF's looked ok, but some looked like extremely small print.
The PDF reflow worked really well with some PDF's, essentially converting the PDF to eBook-friendly material. It even did a good job correctly ordering text that was formatted in columns. However, it doesn't do anything with images or crazy font symbols, and it completely discards a lot of whitespace formatting. So for documents with lots of symbols, diagrams, or with extensive page-layout...things can quickly become chaotic or even useless.
Picture time! I apologize for the poor quality--these are iPhone shots under subpar lighting conditions. I shrunk the image sizes since there was no point keeping them big.
NOTE: these pictures are blurry, the text was not. All of the text in the shots below was legible. Even the tiny text from the 2nd to last set was just barely readable. As I discovered, 800x600 on a 6 inch display is really quite sharp. Since these pics are sadly so blurry, they're mainly to give you an idea of proportions of text-size to the device.
This is a PDF I made myself by copy/pasting a CNN article into an RTF editor, copy/pasting THAT into a Pages document, making it into two columns, and then converting to PDF (using OS X's built-in "save as pdf" option under the print command). Portrait, landscape, and reflowed. You can see the reflowed works very nicely here. I had one other PDF (some anthropology abstract) that was bicolumnar as well, and reflow worked really well on it, too.
Here's that same article in its original form. This is also a PDF I made by loading the web page in Safari and choosing "print", then "save as PDF". Portrait and landscape shots. This was very attractive looking on the reader, reminiscent of a mini-newspaper.
This one is the book I bought earlier this evening. The first image is the epub version. It's definitely the easiest to read, and appears appropriately formatted and well-behaved. The second image is the exact same book as a PDF (both versions were included in my purchase). You'll note is has much larger margins but is otherwise pristine. The third image is that same PDF reflowed. It looks fine for the "narrative" part of the text, but the formatted directory listing gets garbled.
Here's a PDF that doesn't use "text" but is probably from a scan, so...more like a photograph of text. Basically, it's an image. You'll notice that it's just really small and there's really nothing you can do about it. Even if you're willing to tolerate a poorly reflowed document, that's not even an option here since there's no real text to work with. Both portrait and landscape look small, I included a third image with the portrait text superimposed atop the landscape text. You can see landscape really is bigger, but viewed in isolation they just all appeared too small.
Finally, here's a math document.. with both equations and diagrams, it actually looks fine when viewed normally, but if you want to make it bigger than landscape offers, it's completely unacceptable in reflowed form. I can swear I've seen this document used in this forum before, it must be the top hit for "math pdf" on google :P (portrait, landscape, reflowed)
I did most of my testing on the PRS-505. In the last 10 minutes before the store closed, I put my memcard into the PRS-700, and tried out the PDF pan and zoom. They really do work pretty nicely, but if you try to dismiss the zoom controls, it unzooms you. As a side effect, you can't turn pages or do anything besides zoom and pan while in zoom mode. So if you have one of those PDFs with fat margins, you can't zoom-crop the margins and then happily flip through the pages. The second you try to do turn off the zoom mode (which you'd need to do to turn a page), it zooms all the way back out.
In light of that, I think it would be good for longer documents, where you have to pan up or down a lot to read everything OR it would be good for documents with occasional small print or diagrams. It's not a good substitute for a font-size boost. It's a great feature, nonetheless.
Unfortunately, the 700 screen just drives me bonkers. It might be better on your eyes than LCD, but it really doesn't look like an e-Ink display. It reminds me more of of a PalmPilot with the contrast set too low. The 505 has nice contrast, and the "white" even seems to have some grain to it (like paper).
Unless you absolutely needed PDF zooming or notation capability, I'd recommend the 505 over the 700. It's a tough call for me, because I don't need annotation right now, but I might after summer. It's also a feature I'd like to investigate pedagogically. It's this dilemma that makes the Kindle2 really appealing, with its keyboard. But has less open-format support! Argh
