Welcome to MobileRead, Orac!
I have a Sony 700 and love it, but no matter which reader you end up purchasing, it will become your most faithful companion!

As to the question of formats, each Sony owner will probably give you a different answer as to which they prefer for the reader. I tend to use the .lrf format which is the one originally intended for the Sony readers, although EPUB and pdf files will work. I usually buy my ebooks in .lit format and convert them for use on my reader. When the time comes to purchase ebooks and if you still have questions, feel free to ask. We are all happy to help.
Happy Reading!