Battery Life, Price, Size, Screen
I picked up a PRS-500 in the US 18 months ago and it's had a lot of use since then. Anything you can convert to .txt, .rtf or a Word doc (i.e. anything not DRMed) can be read on it, as well as protected content from Sony's own store.
Battery life is pathetic compared to what Sony state - if I can get through a whole novel on one charge then I'm doing well. Which is a shame because being able to carry 10 or 12 new books on holiday without needing an extra suitcase is a great strength of the Sony Reader. Unfortunately I have to take reader and charger, though happily the charger from my PSP will also charge the Reader.
The size is ideal - about as big as a large paperback, but thinner, and in use it doesn't feel cluttered with controls on the front. It also comes with a book-type cover for protection which allows you to hold it like you're reading a book.
The big thing people miss about this until they've used one however is the screen. It is NOT the same as reading on a PDA, iPhone or laptop because the e-Ink screen isn't refreshed in the same way, nor is it backlit. This means that although the contrast is lower, it's more akin to reading printed word on paper than on a computer screen, and doesn't cause eyestrain in the same way.
I read another review where the reviewer complained that because there's no backlight you can't read it in the dark. Duh - how often do you read a paperback in the dark?
Finally, price. Yep - I paid $350 for it. That's a hell of a lot of paperbacks. You'd have to sell protected content really cheap if you wanted to shift a lot of these, methinks.