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I've had the same problem with the Waterstones Site (I'm in Ireland) in that i've found utterly irritating. I haven't been able to search for anything properly, and have to trawl through lots of dross to find what I want: only to find there secure payments system is down. Worst of all, they don't publish an email address for queries, just a Postal address! Welcome to the 21st century lads!
I've always liked Waterstones the Stores, but their headoffice needs a good shakeb by the looks of things. They had the deal to sell them in Ireland over all other book shops, but as of last week, 18 stores still had not received a single one to pass on to their customers. I bought mine in Xtravision; A DVD shop!
Anyway, in answer to your question, yes, PDF does work on it, and I've had word format and txt on it too. I'd recommend using Calibre over Sony's interface as it gives you a hell of a lot more control and features. Oh yeah, and it works.
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