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For what it's worth, Kobo has some distinct advantages over Kindle, but most are related to patching. If you would like to expand the H2O's capabilities, like add actual PDF readability, add additional reader programs and interfaces, like KOReader (or the new and excellent Plato), I think that Kobo is the current champion, with PocketBook coming in at second place. If you're willing to invest a bit of time, you can side-load multiple, proper English dictionaries, add fonts, tweak default margins and various size steps, mod the header and footer so that the text reaches the edges, if you so wish, all within the native interface. You can even unlock some cute games!
Basically, once you tweak a bunch of details and ranges to fit your preference, it will become very difficult to pick up an unmodded Kobo device, let alone a Kindle! However, from most reviews I've seen, Kindle is still the champ for the "fire up and go" usage scenario. Though, it's worth noting that with some initial patience and testing, once you decide on what you want, you can set up an easy system that will cost you only a couple of minutes whenever there's a firmware update. The rest of the time, the patched software will act exactly as you have set it up. With those expanded capabilities, Kobo is a killer!
From everything I've read - and I echo this sentiment fully - the main downsides of going Kobo are its native, out-of-the-box state and problematic quality control. The ideal situation would be to check your device for issues during purchase, to make sure you have a good specimen. If you have a good relationship with your retailer, that will certainly help. I'm not sure if patching the firmware would break your warranty, though. In a pinch, it should be possible to revert to the unpatched state with a reset, and nobody should be able to detect anything suspicious, though more knowledgeable persons should comment on that.
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