Apparently others have noted that the covers generated for books stored on the SDHC card may be blurry or of lower than desired resolution, so it may be an area they'll be working on for a future update. I'm not really defending Kobo, but it is a new feature concerning caching images on the SDHC, so maybe a little in the way of growing pains is to be expected. OTOH, you'd assume most of the code would have just gotten ripped out of the working code for internal storage and have been reused, or perhaps with a modular approach just pointed at the proper storage location...
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