Read the spec! SD cards above 2GB in size are not supported. Best thing to do as far as library navigation is concerned (at least until/unless we get folder support) is to organise your books on your PC, and just have on the Gen3 those books that you're reading at the moment.
I'm astonished that you're disappointed by the screen. Everyone I show my Gen3 to has been absolutely stunned by it. There's just no comparison to a mono LCD screen.
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