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I usually use epub books, but that's mostly out of habit. I have downloaded some mobi files and they were perfectly readable. Any ebook that I have ever been interested in has been available in either epub or mobi. I have tried PDF, and some looked great and others didn't.
With regard to illustrations, the limitation here is the monochrome screen. Most color illustrations have looked pretty muddy on my screen. B&W illustrations look pretty good, and line drawings look great.
Books load quickly enough that I can't ever remember getting impatient.
Seriously, I think you're going to have a blast! Enjoy!
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