I only registered to answer your question, but I think I`ll stick around cause this seems like a very nice place.
I currently have a Sony PSP and I use it extensively as an ebook reader. I bought it for very cheap (second hand) and I was secretely hoping it would turn out to be a good reader, besides support for games, movies and music.
Much to my (pleasant) surprise, things have turned out quite well. I started out using PSPPdf and later on the browser reading html formatted ebooks, but quickly realized that reading like that is more of a burden than anything else; spent lots of time trying to come up with the perfect font and got really annoyed to see it didn`t save the position when exiting the browser.
Without trying to lengthen the post unnecessarily even more, I found this awesome piece of homebrew called
bookr which supports PDF files natively and, even better, TXT files as well. I found reading PDF much more difficult than TXT because the screen is way too small and moving + zooming around to read a single page gets very annoying after a while.
However reading simple TXT is absolutely great, at least by my standards. I use a black background, a very light cream text color and Arial as font (it supports custom fonts too) -- I`ll have to experiment a bit more with fonts, I`m sure I can find something better. Using minimal backlight (which is not only enough, but recommended, it`s a lot easier on the eyes) the battery lasts about 7-8 hours. shortcuts can be customized to your liking, which makes it much easier to flip through pages; while it supports bookmarking, it also remembers the current position in the file when you exit the program and it stores that information separately for each opened file, so you can read more books at once without problems.
Screenshots of bookr
can be found here.
Actually gaming is the least I use my PSP for nowadays, it`s mostly reading, listening to podcasts and watching movies.

It has to be the best investment I ever made and I wish more PSP users would know about the existence of bookr. I am considering to buy an eInk device, but not now, perhaps in a few years after the technology matures a bit more and reader prices drop significantly. Until then I`ll be perfectly satisfied with my PSP.