Originally Posted by JSWolf
If you were to return the 505 and go for a Gen3, you might run into some major issues in your reading preferences. Mobipocket being an old format was developed for PDAs. Such that images are small. So small in fact that they won't look good on a Gen3 or iLiad. You read nonfiction and if the images in any of those books are important, your reading experience will be poor. If you keep the 505 and go the MS Reader format to LRF, then you'll find you'll have a better experience given that the images will be larger.
I believe that you are being over-pessimistic in generalising that ALL Mobi files have images which are too small.
Take a look at my "Sherlock Holmes Omnibus"; a number of the stories in that contain illustrations. See, for example, "The Dancing Men" or "The Golden Pince-Nex", both in "The Return of Sherlock Holmes". I think that you'll find those illustrations to be a perfectly acceptable size in my Mobi version.