I can't find the thread, but I recall a discussion here a while ago about (pre-EPUB) Secure Adobe ebooks in which I was assured that these were not conventional PDFs but rather true reflowable ebooks. The fact that they don't reflow across page boundaries on the PRS-505 at a minimum indicates that they do contain page boundaries (i.e. they are standard PDF files after all). Fictionwise says that "Adobe Reader for Palm OS v3.0" can read Secure Adobe ebooks, can anyone confirm that the Palm version reflows across page boundaries? How about Adobe Reader 7.0 and/or Adobe Digital Editions for Windows - do they reflow Adobe ebooks if you run them in a small window?
The reflowing capability of DE on the PRS-505 for standard letter/A4 PDFs appears to be an improvement over alternative display options, but perhaps we just have not come across enough hard examples yet.