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As much as you're avoiding the iPod Touch, and as good as your reasons for doing so are, I actually think it might be a good idea to save up for one. The screen to device ratio is probably the best you can find, and it has the most active software community, so your odds of getting a reader you like are high.
Plus, you can use it for music, movies, etc.. all that stuff. It's a multipurpose device. Maybe you should hunt around for refurbed units or used ones? Apple updates them often enough that there is probably a healthy secondary market.
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