That's a very interesting comparison - thank you for making it.
As a fairly long-term (since December) Sony Reader user, I completely agree with you about the Reader's suitability for reading books. With its long battery life and instant "switch on and read" it really does make a perfect substitute for paperback books, and that of course, is precisely what it's intended for. It does that job very very well indeed.
People who are disappointed by the Reader tend to be those who buy it with false expectations - most notably that they're going to be able to use it to read A4/US Letter PDF documents. Trying to read an A4 page on a screen that's 1/6th the area is an exercise in futility.
As you say, the Iliad and the Reader really are very different beasts, aimed at different markets. I'm pleased that you've found that the Iliad is right for you - I feel just the same way about my beloved Reader
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