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The screen really is the biggest difference. The PRS-500 has a "first generation" eInk screen; the 505 (and all other current eInk devices) have a "second generation" screen which has much better contrast, and doesn't suffer the "ghosting" which sometimes plagues the 500.
Bear in mind too that all PRS-500s will now be something like 2-3 years old, which means that the battery will be losing its capacity to a greater or a lesser extent. The battery on the Sony devices is not "user replaceable", and is quite expensive to have replaced by Sony.
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