The Kobo supports EPUB and PDF documents (including those with Adobe DRM). That means you should have no trouble accessing the thousands of free public-domain books, such as those available via Google Books. Unlike some other e-readers, though, the Kobo doesn't support viewing image or audio files--that means no JPEGs or MP3s.
Though we found it a little cumbersome to upgrade the Kobo eReader's firmware, navigating the device is fairly straightforward; you use a combination of the four-way D-pad (with a center select button) and the four buttons on the side of the device ("Home," "Menu," "Display," and "Back"). To page forward you click on the right side of the nav button, and to go back a page, you click the left side (alternatively, you can use the up/down sides of the button).
The Kobo is fairly plain-looking, but we didn't have any serious issues with its look and feel, and it's better designed than the generic Aluratek Libre ($119). At a hair under 8 ounces, it's relatively compact and lightweight and can be held in one hand for reading. The iPad, though far more versatile, feels almost bulky by comparison. Even the Kindle and Nook are larger and heavier than the Kobo.
As noted, we found the type a little lighter on this e-reader than on some competing models, and the text not as sharply defined as it should be. Like all of the current generation e-ink e-readers, there's some lag when you turn pages and go back and forth between books and the home menu. On the plus side, you can choose from five adjustable font sizes, as well as serif or sans serif styles.
Battery life on the Kobo won't be a problem: the sealed-in battery provides up to two weeks of reading on a single charge. You can juice it up from any USB port or USB AC adapter.
The biggest issue the Kobo has is that the Borders e-book store isn't integrated into the device itself, which has also been a downside to Sony Readers. The fact that you have to connect the device to your computer to access new content (unless you have a BlackBerry) just seems a little passe at this point, especially when you have e-readers in a similar price range that offer this feature either via Wi-Fi or 3G wireless connectivity. (At the same time, Borders and/or Kobo are offering an e-book store app on wireless devices like the iPad, iPhone/iPod Touch, BlackBerry, and Android phones). It also should be pointed out that the Borders e-book store doesn't hold any sort of competitive advantage over what Amazon or Barnes & Noble offer with their e-book stores.
Back when the Nook and Kindle cost $259, we would have been willing to recommend the Kobo as a decent budget e-reader. But now that those products have had price cuts, it becomes much harder to see the value in the Kobo, even with a $20 gift card thrown in. As it stands, the Kobo probably needs to get to $99 for buyers to really take it seriously as an attractive budget choice in the highly competitive e-reader market.