We snagged some details on the Sony Reader we've been spying as well as some precious one-on-one time with the device. We should expect the device to be available in the U.S. this spring (Europe will have to wait for some licensing issues to be worked out with publishers) with a target date of April and a retail price between $299 and $399 depending on bundles accessories. The online book store will launch with about 10,000 titles, with each book available for approximately 20-25% below regular retail price for the physical copy. The display quality is very nice on the unit -- crisp and clear. The UI is fairly intuitive to navigate and you've got several options for frequently used functions such as page turning.
The unit reads PDF files as well as Sony's proprietary (anyone surprised?) BBeB format (stands for Broadband Electronic Books). They will be releasing software for reading BBeB format on your computer so you can read books you've purchased on your PC as well as on the Reader, but apparently you can only "share" your copy of the book with up to six other devices. When pressed for details about how this "document DRM" actually works, the PR rep we spoke with had zero information -- we asked whether a Mac version of the BBeB-reading software would be released but no word on that either.
There is a bookmark feature on the Sony Reader such that you can mark multiple passages and pages for later reference, but there's no on-board search capability. There is search capability in the PC BBeB reader software, but we were told Sony's research indicated on-board search wasn't a high priority for users (or at least the focus groups they asked, in any case). The unit comes with a docking station for connecting to your computer, but there's also a standard USB port on the bottom of the unit in addition to the docking connector, so presumably you don't need to lug the dock around with you to transfer files on the go.