wow, i actually managed to finally solve the problem after HOURS of PAINNNNN, i read up on several threads regarding the similar problem.
This order of things solved the problem for me.
(1) Connect KOBO to PC with USB.
(2) Open KOBO folders and DELETE the file koboreader.sqlite (okie, i cut and copied it onto my PC desktop - i HATE this file).
(3) Eject KOBO. All 100 pre-loaded books would have disappeared from your KOBO upon update.
(4) GO to Settings and Advanced and RESET to factory default.
(5) Afer reset, power up KOBO, connect to PC again, go to Borders(or KOBO) desktop application (yes, i firmly believe that this is the stupid program that caused all my problems) and click SYNC.
(6) Afer SYNC, disconnect KOBO and I saw all the epubs and pdf and ade that were on my sdcard as well as main memory.
(7) Re-connect KOBO to PC and start Calibre and it can once again read the contents and add and delete contents off KOBO.
THings i will do NOW:
DELETE THAT pesky koboreader.sqlite file from my desktop - i can do without the 100 free books, if i cant read my own books, what is the point of having them???
UNINSTALL borders desktop application, if only i didnt use the program at all (curiousity killed several hours of mine !!) i would have been able to zz 3 hours ago !!!!!
THINGS I WILL NOT DO IN FUTURE
KOBO> sorry, until i hear that your firmware UPDATE is FINE and i mean FINE from all the reviews, i am NOT going to touch it at all. Your desktop application was painful as it is.....