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I'm in the same situation,
What I've done is
1. download LIBprs500 which manages content on the reader and some conversion of content.
2. download convertlit (google it, its the first result)
With those 2 apps and a large amount of help from a forum member I was able to start downloading "microsoft reader" formatted books from the ebook stores and convert them into lrf files for the sony reader.
As far as buying books through the connect store i have'nt been able to do it because you need an american based credit card. Unfortunately we miss out on the 50 dollar gift certificate.
If you have any questions you can PM me and I will do my best to help you.
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