As a developer myself, I just want to chime in with some thoughts.
First of all, getting users to change to new technology is always hard. Hence all the whining about .NET 4. Seriously, it really is a big improvement in .NET technologies, but it is also JUST a framework. No different than loading DirectX or .NET 3.5 on your system. Hell, there are even some people developing .NET 2.0 applications still, and yes you have to load that old framework too. Loading .NET 4.0 will not hurt your computer and does nothing but give you access to applications using the new framework which actually has huge benefits to you, especially in the case of user interface, which looking at this application you can tell they are making good use of the .NET 4.0 platform.
I don't work with the folks who make this software by the way, so get it out of your mind!
I just know how they must be feeling. How do you give people the best of application you can provide with the best technology when people are resistant to change? You have to continue forward and do the best job possible. In the end, if your product is good, people who are serious about having a good product for whatever task your product performs, will look into your application.
You can never beat pricing though. That is always going to be an issue, and as long as Calibre, an excellent piece of software in itself, is free -you will have a tough sale on your hands. I would suggest you keep to the free model and make money through partners related to the application. There are many ways to do this, but I'll let your marketing guys figure it out.
P.S. Does it offer reading of the ebooks on the PC as well? I'm not really happy with the viewer built into Calibre. I would definately like to see a reader for the PC (to use on my netbook) come out that matches some of the readers out for ebook devices. FBReader is the best one I can find right now. I'm talking something like Aldiko with visual libraries and animations. The Nook PC reader is pretty nice, but the settings are terribly limited. If this is a WPF application you could do some great animation stuff on page transitions and book/open/close. Are you using any after-market controls like Telerik or Devexpress?
P.S.S. Installer works perfectly for me. Just waiting on a key.