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For what it's worth, I had the same problem. Don't know which version I was upgrading from, but it was probably about 8-12 months old, and after upgrading I was no longer able to view collections on my Sony PRS 500. I tried installing the Sony Library software to manage them, but uninstalled it when I saw how terrible it is.
Then I found this thread and tried deleting all of the books off my device. This solved the problem.
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