According to Mobile Tech Review, the new PRS-700 is better than the previous Reader:

Sony has worked a near miracle with their touch screen and touch-centric user interface. The Reader is simply a joy to use in terms of ergonomics, control and navigation. This is by far the most natural way to manage, navigate and read books we’ve seen so far. Alas, its lesser contrast doesn’t warm our bookish hearts, and for those in love with e-ink’s paper-like look, that’s a tough one to swallow. For those new to eBook readers or those who don’t mind reading from matte notebook displays, the PRS-700 has greater appeal. As always, the Reader is a great way to carry around a huge library of books and avoid the storage issues of traditional books.

I was actually playing with the current model yesterday, and while it’s a lovely wee gadget it’s still not the right reader for me. What I want is the Reader’s form factor with the iPhone’s wireless and two apps: NetNewsWire and Instapaper. That’d work.

As Engadget says:

with no wireless of any sort you’re stuck filling this one via USB, SD, or MS Duo. In other words there’s still no perfect choice in the world of the e-ink reader — but it is awfully hard to ignore the Reader’s sleek exterior when compared to the Kindle’s distinctively sci-fi doorstop look.