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I just picked up a Sony PRS-650 ereader off Kijiji for $20 and I'm absolutely giddy!
Works great, battery is solid, and it has a damn STYLUS! It even has physical buttons for home, page turning, options, and zoom. I couldn't ask for anything more 
If the only thing I need to compromise on is that I need to manually add books onto the reader, I'll take that ten times out of ten.
Calibre works perfectly for managing books and I've had no issues with .epub compatibility.
It allows you to draw freehand and highlight, made easier with the stylus.
It even has a speaker to play mp3s.
There is so much packed into this device I could go on and on.