I reluctantly agree that the Kindle 2 meets most of your requirements. The Library use will be problematic at this time. The Sony PRS-505 can meet the EPUB format that some libraries use but doesn't meet some of your other requirements as well as the Kindle 2.
Also as Igorsk says, be sure to check out the Baen site. Lots of good SF with a leaning toward military SF but also plenty of other SF & Fantasy. The nice thing about their ebooks (aside from being free for disabled Vets) is that they do not have DRM (Digital Rights Management) and they have formats for both the Sony & the Kindle.
The main advantage of the Kindle is their connectivity. You don't need a computer to buy ebooks - they can be downloaded directly to the Kindle from Amazon (assuming you are in the right wireless telephone area).
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