The annotations are normally stored as a separate file and overlayed by the eDGe on top of the PDF; however, you can "save as pdf" in which case a new PDF is saved with the annotations, highlighting, etc. is saved overlaying the original PDF. The main drawback is that if you do this, the entire PDF file is all image (i.e., no longer text), which renders keyword search within the document inoperable.

The PDF flow is not one of the devices strengths, IMHO. Navigation on a PDF page in general remains an area that needs improvement, including adding support for viewing eInk as landscape. enTourage is apparently working on improving this functionality, but at present I suspect that you will find this aspect of the device to be lacking.