Sony Reader don’t have internet connection, and you must buy sbooks through computer and copy the books onto it. For the Kindle 2, it comes with free unlimited internet access, so you don’t need to pay for it either. However, you can still get books through computer for the Kindle. See the section "Shopping and Downloading Archived Content without Whispernet Service" in the official page here for details:

http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fhelp%2Fcustomer%2Fdisplay.html%3Fie%3DUTF8%26nodeId%3D200375590&tag=moreinfo-po-20&linkCode=ur2&camp=1789&creative=390957

Between the Kindle 2 and Sony Reader Touch Edition, I’ll suggest the Kindle 2 because it has free wireless and text-to-speech function. There are more ebooks you can find available for the Kindle too. There are some good comparison between them here:

http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Freview%2FR3ULAFVHBGYVQP%3Fie%3DUTF8%26ref%255F%3Dcm%255Fcr%255Frdp%255Fperm&tag=moreinfo-po-20&linkCode=ur2&camp=1789&creative=390957

http://www.speedreaderxreview.com/kindle-2-0-vs-sony-reader-prs-700bc-comparison

And in case you don’t know, Amazon has recently put a price slash on the Kindle 2, and it is now selling $100 cheaper than the price I got my Kindle, and it adds in international wireless access… So take the chance if you want it.

Hope it helps