I think that my issue with the dictionary arises only when I try to change the dictionary.
So, if I reboot my Reader, open the dictionary, change the dictionary, press the home button, open book, use dictionary. Everything works fine.
Now since changing the dictionary is one of the parameters in the "Settings" app, the issue might be related to the latter app.
The issue if getting problems after waking the Reader from sleep might also be related to the Settings app, since there's a setting related to sleep mode (Cover of last book/ Selected pictures, show message).
Where are these settings stored? On the data partition? If this is so, what would happen if I format the data partition clean? Will the unit be "factory initialised"?