I've got an iLiad and a Sony Reader (which has the same size screen as the CyBook), heb, and you're absolutely right; the large screen of the iLiad does make it a completely different reading experience.
On the other hand, the compact size of the Reader makes it much better for travelling with, and its "instant on", compared with the 45 second boot-up time of the iLiad makes it a lot more suited for when you only have a few minutes to read.
I plan to buy a CyBook as soon as they are released, and will use the iLiad at home, and take the CyBook to work and on trips with me.
Both types of device have their place.
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