Welcome to MobileRead, Jary!
The screen may be the easier one to answer -- it does tend to lighten some with usage, but it's never going to be white. If you're in the neighborhood of a 10%~20% gray, you're doing good.
Your PDF question is more involved. It sounds like your PDF is formatted for an A4/Letter sized 'page.' The Reader takes whatever the PDF's 'page' size is, and scales it down to the size of its screen (Switching to 'M' crops the margins, but that's it, as you've discovered). There's just no way an A4 page (almost 14" diagonal) is going to be legible on a 6" diagonal screen.
There are a few options open to you. The best is if you have access to the creation of the PDF, either create it with 'pages' sized to the Reader's screen (there's some info on that
here), or just use a different format, like RTF (if you need in-line pix, you can create your own LRF file using one of the many
tools referenced around MR -- BookDesigner is a forum favorite).
If you don't have access to the pre-PDF source, then something like
PDRastafarian, is your next bet. It'll slice-n-dice your PDF into chunks that fit on the screen.
If you want more details/discussion, you can get them fairly quickly by searching the
Sony Reader sub forum for references to PDFs, that'll get you lots of info.
