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Well, battery life is very important. So that rules out all WinCE units. Palm works very well. I suggest that you head to your local store and check out the Palm units to see which one has a screen good enough for you.
When it comes to "standard" eBook formats, there really is none. The only ones that I support are PalmDOC, HTML, and standard word processing formats. I then convert to whatever I need from there.
Formats like .lit are proprietary and should be avoided. But if you need to read such files, your choices of an eBook reader are very limited. .lit is a Microsoft only format, so you need to have a WinCE unit to read it.
Also, some formats (like .pdf) are horribly bloated and don't work well on handhelds in general (it depends on how the .pdf is formatted).
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