The current buzz is that by February 17th there will be an operating system update which will permit the download of other readers and I'm sure I saw mention of Overdrive possibly being supported as well.
There is currently a Kobo Reader in place, but it's very restrictive ... to it's own bookstore. I don't think that you can sideload into it at all ... let alone library books.
I purchased an app called Book Reader ... but it doesn't support DRM which puts the kibosh on library books. While I dislike [and so remove] DRM on books that I've purchased, I wouldn't dream of removing the DRM on library books.
Personally, for every day reading, I'll stick to my Sony PRS650 because long term reading on an LCD device, even one with a brilliant screen like the Playbook, begins to really bother my eyes. That said, I do use the Playbook to read the Beatrix Potter books to my granddaughter and for cookbooks.