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There is a newer firmware available, it's number 2.1, but it can't reflow pdf-files, too. Regarding pdf files this newer firmware is worse than 2.0 cause in 2.0 you could crop margins, in 2.1 this function is missing. If you wish you can try it out yourself, you can download it from Bookeen's homepage.
On a more general note: as many pdf files are formatted for A4-pages any 5" or 6" reader will have some problems displaying pdf files. It's best to use epub if you have the choice.
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