I have been using a 4 gig SDHC card since I got my reader. It works fine and it doesn't noticeably effect the speed of the reader at all. However, Calibre does NOT support it. You can't move your files onto it using Calibre. You can only use the memory stick. The Sony application does support moving files to an SDHC card, but I like Calibre better anyway.
My advice is buy a Sony Memory stick Pro duo, which you can get in up to 4 GB, and which Calibre does support.
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