As it happens, both my most favorite podcasters - Leo Laporte as well as Steve Gibson are passionate e-book readers. They have both purchased and are (mostly) happy users of the Sony PRS-500 aka Sony Reader in addition to several other platforms - (Palm, Pocket PC). In the latest podcasts - both in TWIT as well as Security Now!, the eBooks and eReader got quite some publicity :-).
Both had similar experience with PDF format on PRS-500 as myself - but Steve mentioned the PDF re-flowing the document to make it better suites for small screen - something I have looked into but did not get it working quite right. The preferred approach to using Reader is RTF format - which again, matches my impressions.
Nice discovery was that some independent sources - other than Sony store - are offering ebooks in LRF format. As an example see McCollum’s books - a hardcore, scientific sci-fi (no dwarves, elves, spells and dragons here :-)). Thanks for tips, gentlemen - I have added McCollum to my reading list.