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I have also had my Kobo for a few months now and have had no problems with using Calibre to load epubs to it although it can take some fiddling to get the margins etc. to your liking with some books.
I have also used Adobe Digital Editions to borrow library books.
The database is used for the preloaded books and books you purchase via the desktop app.
Books loaded via Calibre are .epub files
Happy reading!
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