In the US they have the 6" PRS 950 which comes with a WiFi link to the Sony eBook store. It's a really nice piece of kit, but useless over here as it only goes to the US store (which needs a US credit card billing address). Sadly as long as Sony have their link to the Waterstone's store I don't think we'll see the 950.
The PRS 650 big brother to the 350 is a fine reader. In black it makes the screen look even more contrasty.
But yes, unless Sony can make their readers immediately more compelling to newcomers, Amazon will end up owning the market. Call me radical, but it'd help if Sony tried advertising the bloody things. I've lost count how many people have come over and said 'what's that?' and then 'I didn't know these things existed' followed by 'where can I get one?' when I've been out and about with my Reader.
BTW. Thanks for the reminder, I have to charge mine before my day trip to the security checks at Heathrow.