I have found a way to copy books over from the device to the library. You plug in the device, stop the sync, the click on the device icon on top (Reader) and now the tabs (books, periodicals, etc.) display what is on the Reader - find the file, select 'copy to my library' and it copies the file to the PC. With annotations.
But the annotations don't display properly on the new software - all the handwritten stuff is pasted in little image files you open on the document, clicking on them one-by-one. And the export feature does not work properly with annotations anymore either, it places annotations on the wrong spot on the page.
However... making progress...
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