My local library (Chicago) had a decent selection, and I can't wait to start checking out books. The reason I have not done so yet is that I can't read them on my PRS-500. I have no interest in spending the time to break DRM and convert library books. I want something I can just drag on to my Reader and use. As soon as Sony either announces the "upgrade path" or I break down and buy a 300, I'll be taking full advantage of the library offerings.
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