I've been reading ebooks since the late 90s on a variety of Palms and now on a Sony Reader. I find that higher resolution is better. I certainly believe there is such a thing as too much contrast - I like my Palm TX brightness cranked all the way down and I use an off-white background in the day and a black background at night. And I find that eink with reflected light is far more comfortable than a backlit Palm.
After trying a few different night reading solutions with the Sony Reader I found one I like. I don't like the white LEDs for night reading - too white, too bright. I found a head-lamp at Target with a single red LED to keep from spoiling night vision. I don't really want to put it on my head but I find laying it on the pillow by my head, pointed up at the Reader works best for me at night.
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