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1st Gen eInk screens (such as that used by the PRS-500) definitely do seem to lose a certain amount of contrast over time. It doesn't seem to be an on-going process - they fade a certain amount and then stop.
2nd Gen "VizPlex" screens don't appear to do so - or at least, comparing my 7 month old CyBook Gen3 (which has a VizPlex screen) to a new one that a friend of mine has just bought, there's no noticeable difference in contrast.
It's difficult to compare an LCD screen to an eInk screen - the results are basically down to personal preference and the lighting conditions. In poor light, a backlit LCD screen will be "brighter", since it emits light, but that very fact leads to eye-strain in many people. In bright light (eg sunlight), the eInk screen will, for most people, be the clear winner.
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