I did a lot of research on e-books for Christmas gifts. The Kindle, Sony and Barnes and Nobles Nook are the three big sellers right now, but the Nook has still not officially released active units, they come out next week. They have demos in most stores.
After much debate I purchased a Nook for my mom. Selfishly if she doesn't like it, it will come back to me. So maybe it was for both of us
I may get some of this mixed up and apologize for it, I am sure others can correct me. All are roughly the same size and shape. All use e-ink that mimics book paper. The Kindle I believe has a keyboard along the bottom while the Nook uses a touchscreen. The Nook also has the distinction of having a color screen along the bottom that lets you scroll books by their cover.
The Nook also supports the widest variety of digital book formats. The Kindle is primarily an Amazon.com only product. The Nook can hold 1,200 books on internal memory and 17,000 off SD card. The Nook also is open source software so you can expect all sorts of applications such as weather and MP3 capacity, alarms, etc. The Nook is also wifi, the Sony and Kindle must be plugged into your computer. Also when you take a Nook into a Barnes and Noble, their stores have free wifi which downloads coupons and deals you can use in the store for coffee, food, discounts on products.
To be honest the deciding factor for me to get the Nook over the others was the font size. My mom needs large print books for her eyes and the Nook by far has the largest variety of fonts to read.
I have considered how to protect the unit if it comes back to me. Nothing they have designed as of yet protects from water damage or dropping. I love to read in my hot tub and would want to protect it from splashes or water. I have some ideas that could work for any of the e-readers, something as simple as a double thick freezer ziplock bag to fitting a waterproof cover over it and seam sealing a thick clear plastic face to the front. The issue with a rigid clear box like Otterbox is that you need to be able to touch the unit to change pages.
Hope that helps.