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I prefer the Kindle over other readers because dictionary lookup, content search and the ability to annotate are important to me. Amazon also has more of the books I want at a better price than the other stores. The free sample chapters are also really nifty. I like that I can read the sample and have the whole book within a minute of finishing. It keeps me from buying books ahead of time with little idea if I'll really like them.
Before I bought my Kindle, I had been leaning toward the Cybook. It has even better dictionary support since you can have multiple active dictionaries at once. It also lets you load your own fonts. There's no search function, though.
Sony has the only reader that support DRMed PDF. Most library books are in this format so that's appealing to me, but the 505 doesn't have any of those features I mentioned so ultimately it wouldn't work for me. It's attractive, IMO, and a good price so if you don't want those features, then it could be a good deal. It also has a way to organize your content which most readers don't. The 700 is quite a bit more expensive but has search, annotation, a touch screen and a built in light. Some say the screen is less readable, though.
There are quite a few new readers on the market like BeBook, Eslick, Jetbook, Astak. I don't know as much about them. It's good to check out which formats they support and see if the books you want are available for them. There's a sticky link for a comparison matrix at the top of this forum.
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