I've had one since April
I've read dozens of books on it, taken it on several trips. My only complaint about the device is they make you turn it off during takeoff and landing!
I think the screen is easily as readable as your average paperback book, if not more so. The screen transitions were a bit odd to begin with, but I got used to them very quickly.
I discovered when you buy a book (at least some of them) from Baen books, through webscriptions, you have the option to get a CD ISO. On this ISO is a LOT more books. I bought the latest David Weber and got an ISO with just about everything he's ever written. Cost: $4.
The sony software wouldn't run on my XP-64, so I put it in a virtual machine. Not the first time I've had to do that! The cost of the ebooks was stupid. You can buy hardbacks cheaper - let alone what you can get at places like "half-price books" Sony software deleted. I did a quick web search and found some conversion software called LIBPRS500 which has been renamed to Calibre since I got my first copy (from http://calibre.kovidgoyal.net/) With this neat piece of software, you can convert from just about any format into just about any other format. I've never needed the sony software.
Bottom line: With a little help from Kovid Goyal, this thing has been the best purchase I've made in a LONG time.