It seems like you're on track to a solution, and if the universal search speed could get to under 15 seconds or so I'd be perfect happy. It seems that since a "book file" is able to move along incrementally without reading all the way through the file, the same should be possible as part of a search and/or "next word" function.
The obvious people to ask about this on here would be
Kovid or
igorsk. I'd bet that they would both have some sort of input to offer on any problems and would probably both appreciate simply having the dictionary software available to use on their own Sony Readers.
A couple of other things: is there anyway to keep the software from starting automatically when I turn on my reader or unplug it from a charge? I guess it's simply launching automatically every time the card is read (such as when it starts up from a usb-connected state) but if there's any way to distinguish between the user popping out the SD card on their own during an "idle" state and whatever happens when it reads off the card automatically, then it might make just a tiny bit more usable. This is something I would ask the gurus above about, though it might involve a somewhat complicated solution to a relatively small problem...possibly something for a later version, once all of the program functionalities are ideal!
I'd also humbly suggest that you include the dictionary I uploaded in the main post (unless having those few lines starting with "-" would cause eventual hang-ups). I think that most people on here are looking for a standard English dictionary, and having that available up front will encourage more people to download the software and beta test it.
Once again, I appreciate the effort you're putting into this and I'll do whatever I can to help from the user-end standpoint.