Almost all of the formatting errors that I've had with my Kobo go away if I read them on my Sony. Overhanging quotation marks, bad justification, mis-aligned graphics, etc.
I'm talking about ePubs that I bought from Kobo and read on a Sony PRS-500. There appear to be fundamental gaps in the way that Kobo renders the ePub files that aren't restricted to the hardware (the desktop reader renders the files the same, incorrect way).
I'm hoping a future update to the software will fix this. Until then, I guess we just deal with it or read on other hardware. :/