I've finally found a way to create proper re-sizable ebooks for my Sony Reader which actually will wrap/flow text for s,m,l but still keep the line breaks for paragraphs and quotations.
Perhaps this is not news to some of you but it was to me, and a few others on here have been having trouble with lines with just a few words on etc. because of line break codes. I did try Stingo's macro and several other suggestions made by others, but this is the only one that has worked for me so far:

Open the pdf in Acrobat,
If you have Acrobat Pro you can crop all pages to remove page numbering if need be.
Copy and paste entire book into EditPad Pro http://www.editpadpro.com/
Select: Convert/Line Breaks-Wrapping, EditPad will make pretty accurate guesses at which are line breaks and which paragraph breaks and remove line breaks.
Save as text file.
Open text file with BBeB Binder http://code.google.com/p/bbebinder/ by dragging and dropping the text file onto BBeB Binder in design mode (DO NOT use File/Open).
Titivate as required (add cover art etc.) and save as BBeB format.
Import into Reader and enjoy......

Presumably this will also work for formats such as rtf etc?

Save as text file

So, you loose all the initial formatting, such as italic text?

Muskrat, this seems to require quite a lot of work. Did you try any of the tools available such as RasterFarian?

So, you loose all the initial formatting, such as italic text?

Yes, you do lose that. But it works ok otherwise.

Muskrat, this seems to require quite a lot of work. Did you try any of the tools available such as RasterFarian?

I can't get RasterFarian to work properly. Nothing large enough to read anyway.....

Muskat:

Have you ever tried to globally resize the fonts in a pdf file in Acrobat Pro and then convert it into 3.5 X 4.5 size for the PRS500 ? I have a lot of pdf files of magazines that I would like to read but I can't see reading 5 pt fonts.

Thanks

Ambertape