Thanks Terisa.
So I gave it a go! From sleep mode I plugged it in to my Win7 laptop. I used ADE to transfer an Instapaper epub, closed ADE, did a safe disconnect, then unplugged the Kobo. The Kobo first went into Processing Content mode, then gave the Factory reset error. I selected Cancel, and I was back at the home screen. I can read the new epub and the previous book I am reading. Fine so far.
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