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The Kindle's format is Mobipocket (or Mobi). Calibre will convert ePub and LRF to Mobi, but only if they're not infected with DRM. I can't give you detailed instructions on how to remove the DRM, but if you google Apprentice Alf you should find scripts and Calibre plugins to remove DRM.
Personally, I really like my Kindle. I saw a Sony Reader before I bought it, but didn't really play with it a great deal, so I can't really compare the two.
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