I've had no problems in using my PRS-700 in the UK. I guess I've now had it for a few months. I can both use the Sony e-book store - where a Visa card is accepted even with my full address with just the country set to the US - and Waterstones.
I have more generic problems with the 700. Because of the touch screen you need to use the backlight which reduces the battery life dramatically - which was never as good as Sony suggested anyway. Also in the UK e-books from Waterstones tend to cost more than the paper versions from Amazon including delivery!
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