I used to use eReader's software on my T3 -- I still have it loaded on there with a single file so I can hold it side by side with the Reader and ask people if they
really would rather read from the Palm after they claim they're happy with it (nobody has said 'yes' yet

).
I'd say that HarryT's analysis is pretty much on the money. In a nutshell, the hardware doesn't compare, the Reader is so much better for actually
reading from as to make the idea of continuing to read from my T3
extremely unappealing. But the eReader software is significantly more flexible and feature rich than the Reader's software.
So, I guess I'd say that (all else being equal) if you want to
read, go with the Reader, if you're wanting to work with texts more flexibly, go with the T3 ... or go with the Reader and do the fancy stuff on your PC.