I think that adding mobi output and conversion to calibre, solves most of the file format problems.
By now, the only format which supports dictionary search is Mobipocket, so who (like me) reads books in a foreign language, will stick to it.
Or we can have iLiad read lrf files?
Calibre is open source, AFAIK...
I'd rather choose one single file format, with full support: use a library, browse covers, customize layout (font, justification, hypenation, etc...), bookmark, add notes/comments, full text search, cross-link between books, scribble (and mark / underline with straight lines), lookup word / phrases in dictionaries / Encyclopedias, save screenshots, etc...
And, of course, have calibre support it.
If I have a good converter on the desktop, I don't need a plethora of incomplete readers on the iLiad...
If somebody wants to start a project for one full featured reader for the iLiad, I can help, I think...