Sony just announced their newest eReader, the PRS-700. Improvements over their previous model include a built-in LED light (nice!), touch screen, and quicker refresh rates. It will sell for $400. While I continue to like the physical design of Sony's readers over Amazon's Kindle, I have to say all of these improvements are incremental at best and the price is completely ignoring Amazon as the gorilla in the room. (You can get a Kindle for $359... $259 if you sign-up for an Amazon credit card.) The Kindle's ability to buy and download books over a cellular connection remains the killer app in the eBook world.
I just wish Amazon would take a design class from Sony or Apple. I was on the subway a couple days ago and got to see a Kindle for the second time. The man who had it loved it and let me see for a minute. I was nearly impossible to hold without accidentally turning pages. If/when I buy one, I'm sure I'd get used to that eventually, but am equally sure it would remain an annoyance. I hope the Kindle 2.0 comes out soon...
Sony is also working on making their reader capable of reading more formats and is redesigning thier web-based bookstore.
Read a hands-on review of the PRS-700 here.