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I have one of the Sony e-readers with a touch screen. I've had it for over 2 years and I love it! My mom has a first-generation Kindle (back when they were the only option available) that she really likes as well.
I have the Sony PRS-600.

I have a nook and I love it, but I've never tried a different kind so I can't say if it's any better than a different one!
I have the Kindle Fire and LOVE it! Though I use it mainly for reading its good for a million other things too. The Kindle fire is not like the basic kindle screen wise . The basic Kindle reads more like a book where as the Fire reads like a computer screen (though you can by dimmers for night readig etc). I vote for a Kindle!
I have a nook and I love it. I didn't like the 3 bajillion buttons on the kindle but I think it looks different now...
I think it depends on what features you're looking for. I have a Kindle with 3G that I really like, but my husband just got a Nook Tablet for Christmas that is really nice, too. If you're looking specifically for an e-reader, and not one of the new tablet configurations (like a Kindle Fire or a Nook Tablet), I would say start with a little research at your local library. Sony and Nook both have e-book lending programs available at most libraries, nowadays, and support the widest range of e-book formats. I love my Kindle, but Amazon just came out with an e-book lending program a few months ago (called Overdrive) and it hasn't been adopted by many libraries yet. Kindle e-book formats are also not compatible with any other e-readers.
Finally, here's a comparison chart of prices and features that might be helpful:
I have a Nook simple touch and my boyfriend has a Nook tablet. I like that I can take it with me to B&N and get coupons or read lots of things for free while I'm in the store. Also, since we both have Nooks, the two of us can lend each other books (though we haven't tried it yet). I'd definitely recommend getting one of the tablet models now since they're so versatile!
My Experience:
I have a Kindle 3G (in my favorite color -white!) I love it. As silly as it is, if the color didn't matter to me, I prob. would have just got the new $80 one in slate, BUT mine was a return to Target, so I actually lucked out and paid $75 for mine too (can you say SCORE!) I honestly don't know why I waited so long to get one (Christmas present To NurseMarriedToAFarmer from NurseMarriedToAFarmer). A library around 40 minutes from my house offers the online book thing, so I went there and got a library card for that purpose. I haven't used it yet, but it's through Pioneer so I'm guessing they'll have their fair share of books available, and if they don't it won't take long before they do
Family’s Experience
My sister has the kindle first generation, and we loan each other books. I also have a brother in-law on my husband's side who has the Kindle 3G and he really likes it too. He told me there’s a blog you can subscribe too that offers kindle books everyday for really cheap, I haven't used it yet because I have loads of books I'm waiting to read- but then will def. subscribe to that too (=. Another one of my brother in-laws (the one married to my sister w/ the 3G) has a nook. He likes it, but he wishes he would have purchased a Kindle instead. As for covers, I personally think nook has cuter ones, and a larger variety. However, I simply went on etsy and purchased a handmade sleeve (you can get covers too, I’m just more of a sleeve girl anyway) that is friggin’ adorable.
No Experience Related, but Personal Opinion
I purchased my kindle for the sole use of an e-reader. Although the Kindle Fire looks and sounds pretty awesome, it’s going to be a whole different experience. The kindle is like reading a book, no strain on your eyes from backlight and all that jazz. A kindle fire is going to be like reading on a computer, something not so great on your eyes and much, much different than a book. In school while getting my AA degree I took a class all about mass communications. Apparently, if something is going to printed online, you’re actually supposed to cut your words in half due to the eyes/brain inability to focus as well while reading from a screen such as a computer….or whatever (hey!- it’s been a long time since I took that class, so pardon my vagueness!)
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Finally decided to invest in an e-reader. Hopefully it will keep my pile of books from getting bigger and taking up so much space! Which is better? Nook or kindle?