I have the previous generation Kindle (K3)...the one with the keyboard and love it but the Kobo wasn"t on the market then.
The Kobo can use several different formats Epub, mobi, PDF, TXT, HTML & RTF (amongst others) for books whereas the Kindle uses only Mobi or Amazon"s proprietary AZW format. There are programs to convert ePub & others to Mobi but both are widely available.
I think that ePub is slightly friendlier for casual use but its a matter of preference.
Its also easier to "find" free ePubs than Mobis in my opinion.
Here"s a quick review of the Kobo (with a comparison to the Kindle)...
LINKYWhichever you chose, I strongly recommend some software to manage your books (and convert as required) called
Calibre....it"s excellent.