I own a Sony PRS-505 and Kindle 1. Because neither are the current versions, I can't compare what you are looking at but I understand your dilemma.
I love the Amazon store and buy all of my books from there.
It has the selection, convenience and pricing I want. I buy books more than I buy any other commodity, and I am too lazy to go to multiple places looking for the best price and selection I want.
I eventually bought my mom a Kindle and registered it to my account so we can share books. She loves the convenience and I could never see her going through the effort of connecting her reader to her PC, etc. But that's an added benefit of the Amazon store, not the primary reason I shop there.
But the Sony has become my primary reader
I bought the Sony because I was tired of converting books from the library and other free sources. But surprisingly, I now find myself converting all of my Kindle books (except for the occasional topaz ones) for the Sony.
The funny thing is that:
I prefer the font and spacing on my Kindle.
I prefer the larger page turn keys on my Kindle
I find the Kindle easier to hold
Yet, the Sony seems to be the reader I grab simply because I can slip in my handbag without even knowing its there. Plus I can keep all of my books on it organized into collections (I read a lot of different types of books depending on my mood). Without some sort of folders, I found keeping more than 5 pages of books on the Kindle too much to keep track of (but that's just me)
That being said, I still turn on my Kindle each night to get the NY Times News and AP Entertainment updates.
If I was buying a first reader today, I would still probably go with the Kindle. Simply because of the convenience, pricing and selection of the Amazon store. But I really like having both. I know I probably just added to your confusion
