People have measured the power usage of the Reader, and it seems to be pretty much the same whether it's "on" or "off". The power switch on the Reader is like the "Hold" switch on an iPod - it basically just blanks the screen and disables the buttons.
I don't know what Sony have done to give the Reader such a long battery life - it seems to be something very clever! - but the only point I was making is that the Reader is in the same "state" whether on or off - it doesn't use any less power when it's off than when it's on. If it does use a "low power" state then it uses it constantly, not just when switched off.
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