From the official page of B&N, here is how the Nook compares with the Kindle:

http://www.barnesandnoble.com/nook/compare/

Since Barnes and Noble page is only mentioning the advantage of the Nook over the Kindle, let me try to tell more about the benefit of the Kindle 2 over the Nook:

- There is no internet browser for the Nook. So even with Wi-Fi, you can only use it to purchase book. You cannot do searching in Google, Wikipedia, check email, etc., like what you can do with the Kindle.

- The Amazon Kindle has international free 3G wireless which covers over 100 countries. So even if you’re in places like the UK or Australia, you can access the internet with the Kindle free of charge. The Nook has wireless only within the U.S., and is limited for use of buying books only

- The Kindle is available outside the U.S. (it ships to 176 countries), while the Nook only ship within the U.S. at this moment.

- The Kindle has text-to-speech function, so it can treat an ebook like audio book. This function is not present on the Nook.

- The price of ebooks for the Nook on Barnes and Nobles are more expensive than the ebooks on the Kindle. This can make quite a difference in long term, the price difference adds up as you buy more books.

- Amazon is already doing some change after the Nook is announced (still more than one month for it to be available). They dropped the price of their International Kindle even further. And they are going to release a PC software which can read their Kindle books. They also added native PDF support for their Kindle 2.

One more thing to be aware is that, at first glance you may think the Nook can read ebooks with color touch screen. But indeed the color touch screen is only a small screen beneath the greyscale eink screen, and seems it is only used to browse the cover of ebooks.

In my opinion, it is a tie between the Kindle and the Barnes and Noble. But if you may travel and you enjoy reading during your trip, you should go for the Kindle for sure. Moreover, I trust the Kindle will come up with some strategies very soon, like improving their lending book function. The Kindle is the biggest player in the ereader market right now, and I believe it will put enormous effort to hold its position. Finally, if you’re an avid reader, price of ebooks will also be a big concern, as ebooks on the Nook are more expensive.

I recommend this article as well, it is the best review on ebook readers I’ve ever read:

http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Freview%2FR3QM7LGL62MZ4X%3Fie%3DUTF8%26ref%255F%3Dcm%255Fcr%255Frdp%255Fperm&tag=ereader-2-20&linkCode=ur2&camp=1789&creative=390957

Just check up their homepage to see the latest price of the devices. The price is most up-to-date, and if there is any price change it will be reflected immediately on their homepage. BTW, the Nook seems to be in stock only in Jan 2010, so you’ll not be able to get it in X’mas…

Hope this helps you decide.

There are some basic diffrences between the Kindle and the Reader, here’s a link to the wired website that does a good breakdown between the kindle 2 and the sony reader. http://www.wired.com/gadgetlab/2009/02/showdown-kindle/
There is a Kindle 3 that just launched, and as there was not a review for that I included a link to online reveiws instead. The same for the sony reader. The Sony reader in addition to online capabilites allows you to download books in the borders book stores. That might also be a good place to go if you want to try one out before you buy it.

Kindle
http://www.amazon.com/gp/product/B0015T963C?ie=UTF8&tag=veg0e-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=B0015T963C

Sony Reader
http://www.amazon.com/gp/product/B000WPXQ2M?ie=UTF8&tag=veg0e-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=B000WPXQ2M

Good Luck!

They are VERY easy to use, both physically and on the computer.
They can store LOADS of books anf files – so far I have roughly about 100 books on mine, and there is no sign that the eReader is becoming overwokred or full at all.
They’re very light, so if your wife is like me and usually takes half a dozen books on holiday with her, she’ll appreciate this one, light book to carry!
They’re durable – mine has been chucked around in my bag and hasn’t been destroyed yet.
They can be used easily by both left and right handers – this may sound like a bit of a no-brainer, but the buttons have been positioned very carefully so that the page-turn buttons are easily accessible regardless of which hand you use.
The computer software is fairly easy to use too – it takes a little bit of getting used to, but it is no realy problem. Basically, with mine (which is a little older than the newer eReaders, granted, but I don’t think they would have changed the software THAT much) it’s a case of ‘open file’, and then drag and drop the eBook or file onto your eReader.
The eReaders can be viewed from any angle, and there is no reflective glare from the screen. I’ve found this VERY useful, even with my older version, particularly when you’re reading while you’re grabbing a quick bite to eat! The screen has been specially adapted so that it is easy to read the text through it even if there is a bright light shinging onto the screen, so unlike a computer screen, you do not get screen glare. Also, very useful and something that has had a great deal of thought go into it.
There is a bookmark function as well, so that you can put down a book and come back to it without worrying about losing your place. The newer eReader even has a pen that will let you make note son and highlight text within your books. This stays on your text even if you transfer the book back onto your PC. Very useful if your wife reads a lot of articles, or PDF files etc and needs to annotate.
Anf finally – it looks good! I ahve seen the Kindle and various others and the Ereader doe slook much nicer – very simple, with no fuss.

Kindle may have such extras as an Internet connection etc, but the problem with Kindles is, as far as my research has shown, that you can only buy the Kindle books form Amazon .com, rather than Amazon . co. uk. eBooks can be bought online though from the chain bookstore’s website, and there are many websites out there where you can get free eBooks, mainly those that do not have copyright anymore. One example would be Project Gutenberg – a truly amazing resource! So far I have had texts from there as eBooks, PDF files and RTF files – all very easy to transfer onto the eReader.
I ahve also read various reviews which state that the Kindle is not very easy to use. I don’t know what your wife will use it for, but if she is mainly just going to be reading books on it, you may want to consider whether a keyboard is really necessary, the keyboard being one of the Kindle’s key pluses.

Hope this has helped!

I like to use the text-to-speech function on the Kindle too, meaning that I can "read" with my hands and eyes free…

And I remember I read this review when I decided to get my Kindle:

http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Freview%2FR2DUM7S4XW06QN%3Fie%3DUTF8%26ASIN%3DB00154JDAI%26nodeID%3D%26ref%255F%3Dcm%255Fcr%255Fpr%255Fcmt&tag=moreinfo-po-20&linkCode=ur2&camp=1789&creative=390957

Hope it helps