I'm not too bothered about converting the books to ePub - converting non-DRM stuff to .mobi was easy enough, so I'm certainly patient enough to go to the other way with them. It's the stripping of the DRM that is probably going to give me a headache, but it will be worth it. :P
I'm thinking the PRS-T1 is the closest to what I want, too. Why do you think I should reconsider moving away from the Kindle? I really don't like the new Kindles at all, and I'm disappointed in the Kindle 3 not having an SD slot as it is.
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