I have the 505, and the library ebooks were what drew me toward the son. I wasn't really impressed with the new sony readers, so if you could find the 505 on clearance somewhere, I'd definitely reccommend that. I don't know anything about the Nook, I'm actually going to research that one myself.
As far as libraries go,you CAN check out ebooks from other libraries as long as you have a card. I'm not sure where you live but most libraries in California allow you to get a card as long as you live in the state of California. So, I was able to go to several libraries in the northern California area and get cards, expanding my options for books. Ironically, I end up BUYING more books than I check out from the library. Oh well Hopefully in time that will change.
Good luck and I'll be interested to see what you end up with.
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