What follows is entirely IMHO: (Sorry, kinda long)
I have to agree with Jaed, concentrate on what the device can do for you, not on what it can't do. None of these devices brew a cup of coffee, but that's not what they were intended for. Yes, the iLiad is darn pricey and it was a bit oversold in terms of promised features. Some of those have been added over time (scribble, some form of annotation) and others are promised soon. I have both devices, the iLiad and the Sony Reader. They are two very different devices. I was attracted to the iLiad for the larger screen, ability to read PDF which is my preferred format for both professional and personal reading. Currently, it is my preferred device. I am not a programmer, just a user and for what I do which is read documents and e-books, it does just fine most of the time. The iLiad is somewhat fragile and if not for some good cases, mine would've been history long ago. I don't think I'd bother to repair mine if it did bust, because of the long delays and the costs of both repair and shipping. I'll admit the iLiad is not a great consumer device as there is no bookstore or desktop interface, but it probably wasn't intended to be that in its first gen manifestation. The Sony Reader is a more consumer-friendly device, even though the Connect bookstore and desktop interface is not as sophisticated as say iTunes. If you are interested in mostly reading popular, newer major publisher works and being locked into the Sony DRM doesn't bother you then the Reader is for you. I haven't invested in a lot of Sony BBeB books because for now I see no way I can adapt to another device (like my PDA or another e-reader) currently and possibly in the future. I have no trouble finding the books I prefer to read (yes, BobR, it's still romance) through other means than the Sony bookstore. My Reader is gathering dust lately mainly because I dislike spending the time to adapt my pdfs for the Reader or convert them to RTFs. I do appreciate the device's sturdiness, bookmarking capability, and its instant-on boot time and power management is superior to the iLiad's. I was very pleased to read Sir Howard's encouraging words about the future of the Reader. It's great that there are a growing number of e-reading devices being developed and hopefully some of these will have commercial success and longevity.
Glad you made up your mind, rsuryase. Good luck.