I also have a Sony Reader. I have found some great tools out there. One is the ABC converter series. RTF is the easiest format to which to convert, and is accessible via the ABC converters. But perhpaps more practical is a tool called HTMLtoRTF Converter. There are many texts I have found online that were not already coded into some convertible format; this tool was quite easy to use in capturing HTML books and documents. Also, some great sites exist that have RTF ebooks for free: Manybooks.net is my favorite, and Munseys.com is runner up.
I'm currently working on a way to batch edit the author fields in my RTF ebooks with a C# implementation. If anyone already knows of a tool that can do this easily, please let me know !