I have had problems with the text conversion from PDF to PRC using Mobipocket Creator. I use PDF Converter Assistant by
Nuance. It converts PDF to RTF which I can then use Mobipocket Creator to convert to PRC. The results are much better (text wise) than just straight Mobipocket Creator. Cost is $49.99. I have the Professional version for $99.99 which includes PDF Converter Assistant and two other (almost never used) programs.
So far I haven't tried it with images in the PDF file.