Send in for the upgrade - I don't need another reader (I have the 505, a Kindle 1 and a Kindle DX), but it will be nice to keep to old 500 up to date.
Edited to add: Just a heads up if you do go the upgrade route, note that the UPS label is only good for ten days from date of issue (at least that's what the UPS email said when they sent a confirmation email).
Edited to add to my edited to add: The Sony site says the label is good for 30 days.
I guess the upshot is - don't procrastinate once you've signed up.