Don't worry, I've no intention of buying from Waterstones given their current pricing policy and as I said I've got a large (free) back catalogue of stuff to read. I just can't get my head round what Waterstones are trying to achieve; do they want part of the ebook market? Their pricing suggests not.
I assume books from Fictionwise are DRM'd; does that make format conversions problematic? I have Calibre and have used it to convert some public domain MS reader files, is that all that is required?