I had a Kobo Mini which broke in my pocket, and now have a Kobo Glo, which I like quite a bit. It's primarily built for the Canadian chain Indigo/Chapters so I don't know if it's available for the United States, but it reads a variety of formats and it's not just restricted to their books. Of course, if you want to read something from Amazon you have to use illegal third party software on your computer to take the DRM off. I'm having problems with the .pdf though. It cuts off half the page for some reason, even if I scroll, and it's a pain to scroll for each line with the e-ink anyway (slow and clunky). .Pdfs seem to be a real pain for any ereader. The text is too small and you can't expand it without having to scroll constantly. They don't convert to other formats very succesfully, either. Supported formats are EPUB, PDF, JPEG, GIF, PNG, TIFF, TXT, (X)HTML, RTF, CBZ, CBR
Glo comes with 2 GB of memory which holds up to 1000 books according to the site. I have about 100, but that includes a giant 1 GB .pdf and several other large .pdfs I'm still hoping to get to work. Most are 500kB to 2 MB.
It's expandable to 32 GB, has optional front lighting which can be adjusted from 0 to 100 percent (no backlight, can read with natural light), a web browser (clunky,b&w, and low-res due to the e-ink, but good in a pinch), onboard dictionaries in multiple languages (just touch a word in a book and the definition pops up) and a few other features like Sudoku. A battery charge can last weeks if you only read a short time each day. Display is similar to real paper with a persistent passive display and matte finish on the screen. It loads 3 pages at a time so mostly flips pages pretty seemlessly. Navigation within a book can be a nuisance if you want to find a particular spot or section. You can download books directly from the Kobo bookstore or through your computer.
The best thing to do is get the free open source program Calibre for your computer. You can manage and read all your books on there, create libraries, convert between formats, and even set it up for automatic daily downloads of most newspapers in .epub form (often free). You can then use it to manage, upload, and download books to your ereader.