I've read many ADE ePubs with no problem (font size button works as normal). I think that the very first software release on the Kobo had font size problems but that was fixed at least by July 2010 - do you have the latest software?
PDFs are problematic, if they were produced for a letter-size (8 1/2 X 11) page. I don't think any ereader has a solution for all PDFs. I avoid them. I can read a couple of pages (set to landscape, increase to 125%) but there's a lot of panning and clicking and too frustrating to read a novel that way.
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