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Do you have a lot of epub books already, or are you just now building your library?
I started out using Mobipocket Reader on my PC, so I bought books in the mobi format. Then I bought a Jetbook Lite, and some of the books I bought from Fictionwise had some strange compression problem and wouldn't open on the JBL. For those particular books I used calibre and converted to epub, which the JBL reads equally well. Then I bought a Sony, which doesn't read mobi at all, so I converted everything to epub. Now I do most of my reading on my Kindle, so I use the mobi version and try to buy anything new in mobi format.
Bottom line: I keep both mobi and epub versions of ALL my books in my calibre library. When reading on my Kindle, I can't tell whether the original book was in mobi or epub. I don't generally mess with the conversion settings, though -- I just let the defaults happen, and so far it works for me!
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