Well, let a Kindle owner chime in. Purchasing Kindle 2 would indeed be an upgrade from the 505. I've said several times that the 505 and Kindle 2 are not in the same class. The Kindle 2, 600 and 700 *are* in the same class.
They best way for you to know if the Kindle is right for you is to take advantage of the 30 day trail and put it through it's paces. If it isn't for you, all you've lost is the return shipping.
Also, some of the information in this thread about the Kindle is either incomplete or incorrect, so I suggest you check out the links in my sig for more information.
Good luck with your decision, whatever it is.
EDIT: Oh BTW, there's no law against having both the 505 and a K2!