I applied the update first thing out of the box. My comments are with the first update installed.
Hey - I wanted to like the Kobo - 1/2" narrower, more file formats supported, etc.; that's why I ordered it. However, mine worked poorly, side-by-side compared to the K3 and Nook Touch, and that with the bad choice of fonts, and missing line spacing and margin options caused me to send it back to Borders.
I also sold off the K3, in favor of the Nook...