I still prefer a desktop based reader.

I still prefer a desktop based reader.

Which one? I am currently using Thunderbird, but looking for something else. Thunderbird doesn't handle lots of RSS feeds well. Gets way too slow.

There are definitally some interface limitations I see.

#1 is I see no way to mark a msg unread while scrolling down the unread items.

#2 The side menu needs "Read Items" & "Unread Items" links. All they have is "All Items"

I like most things Google I must admit. I've use Thunderbird as well, but wasn't sold on the interface. I don't know, maybe i'm just so familiar with Gmail that Google Reader feels homey to me somehow. After spending an hour with it i'm pretty pleased. I actually haven't used an RSS/News feeder in a few months, relying one my Google Desktop to keep me up with things, and even though the tabs are a big improvement for me I think the Reader has alot more to offer.

When scrolling as JeremyL points out the unread items remain unread, you are however able to use the "J and K" keys for selecting the next and previous item and they are then counted as read. Lots of keyboard shortcuts to do lots of stuff, but when I read, I slouch in my big chair and relax, not sure if I like having to use the keyboard so much. Well those are my thoughts

In fact Thunderbird handle all RSS feeds just fine to me.
I'm using linux and I tried Liferea and Straw and all of them have problems with some RSS feeds. For feeds which creates problems to me I've heard RSSowl (Java based) have same problems.

I don't use Thunderbird since it has some problems with scrolling (too slow scrolling) on my Linux computer.