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1) some of the books I want to download are in HTML format, is this compatible with Sony
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You can very, very easily convert HTML into LRF (sony's format) with Calibre, which is a superb alternative to Sony's own poor Library software. I do this often, and most of the time images, toc, etc are preserved as well as the actual text.
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2) What software do I install - the Sony software that comes with the reader, Calibre or Adobe DE?
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Skip the software included. Install Calibre, install ADE if you plan on buying DRM'd ePubs.
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3) Am I correct in thinking that anything in ePUB format (with or without DRM) is OK for the Sony?
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Yes. If it is a valid ePub, it's compatible. DRM'd epubs will require ADE for verification, in order to work on your device.
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4) I have read somewhere that PDF format isnt too good, is it possible to change the format to something else?
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Yes, though it's usually not that great. Converted PDFs look fairly good in landscape mode, having used soPDF (available under LRF subforum here, main page > scroll down) to convert them, on my 600. The 505 is still fairly good at PDFs, although slow. Less options in way of zoom/pan than the 600, which I reccomend trying yourself, as it's usually on display beside the 300 in stores. The 300 is hands-down the worst PDF reader available, imho.
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5) Also I want to store my ebooks for any future reader I buy (due to breakages etc). Is it possible to store them in such a way that the format can be changed to suit any future reader or will I always have to buy Sony. I was thinking of doing this by putting them on an external hardrive.
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Calibre automatically organizes your books for you in a back-up-able library on your hard drive... You can, from there, convert them to and from various formats, so you'll be able to use them with non-sony devices. Most every format the Sony supports others do too, as they're all pretty standard. The only format the Sony exclusively supports is LRF (and it's now defunct DRM'd LRS cousin)... Those are able to be converted to ePub or mobi etc and used on other devices.
Hope I helped!