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You can just download the books again using the software, or by going to koboreader.com
You can also download the new software there.
Just click on the "free books" link.
Any DRM free epub works fine. I use Calibre to "share" books between my wife's kobo and my kindle. DRM protected books won't convert though (and even if they do, they don't open on the "transfered to" device).
Good luck. I'm sure you'll love the Kobo as an ereader... just don't expect it to be the swiss army knife of ereaders.
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