OP: if you're having trouble returning the reader, you may want to give it another try instead. It really is quite good (I myself am perfectly happy with it) and (but for some minor bugs) the firmware keeps improving as well.
I can't say anything about ADE books (never used them) and I don't use the Kobo software (though I did use it to set up the reader), but I tend to simply side load the epubs I have by putting them on it directly as on a USB stick.
If you prefer the 'iTunes feeling', you could use Calibre instead (of course it has lots of actually useful options but you can also use it simply as a ebook manager).
I hope your experience with the ereader itself turns out to be better than your experience with Kobo's customer service... but actually I'm sure it will.
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