brownie--the purpose of this update was NOT to introduce new Kobo features, but rather to make the original reader match as closely as possible, given the hardware limitations, the feature set in the WiFi reader. This was a herculean task--much more difficult than anyone thought it would be--because of the need to optimize everything to work within those limitations. While this was going on, future changes were put on hold.
The dictionary works with kepub files (kobo formatted books loaded on the reader through sync). It does not work with sideloaded ePUB files. It may be that at some point, non-drm ePUBs will also work with the dictionary, but it would require some fancy server footwork by the Kobo folks, and this may not be a priority.
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