I used MobiPocket on a 13 line Palm Samsung phone before the Reader. It was like the 3 minute cartoon vs. the original novel. The Reader is far and away the better reading experience. Then again I can't place a call on the Reader. I carry both.
I never had the fancy dictionary lookup features or the index features that some have had with the Palm. In fact if I went to another book on the Palm it forgot where I was in the first book.
The Sony Reader has many more features for me and a beautiful screen. Sure its not backlit but then neither is a book except when its being used as firewood.