I love my Kobo Libra Color.
I have strongly noticed the poorer contrast on B&W documents, and increasing the brightness only helps to a point, but even at worst, the contrast isn't bad enough to make reading uncomfortable.
I've found in direct sunlight, as with the B&W devices, I can turn off the backlight completely and it's fine and looks good. But in partial sunlight, it feels like I can't quite get it bright enough, but it's still readable. Inside, I might have the brightness a little higher than with a B&W device, but it looks nearly as good.
In the handful of documents I have with color, the ability to see that color is a game changer. A few documents have annoying colored backgrounds that make them impossible to read on a B&W device, but are now readable on the color device. Graphs and charts with color are much more readable than they were on a B&W device.
The color itself I find better than I expected. Some pictures look perfect. Others look faded but still are distinguishable. Some pictures look good until the backlight is turned off at which point they turn muddy. I may have to go through my screensavers and lighten a few of them.
Even with the contrast reduction and lower crispness to the resolution, I don't find this much of a problem. I find the color a huge addition sometimes and other times just a bit more fun even when there's no real added benefit.
Overall, I would still select a kobo based on screen size first and then storage size, but I find the color a nice addition, and if I had to choose between two otherwise identical devices, I'd pick the color one.