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I think your original plan makes the most sense.
I would ask if they had an existing or previous reader device or library at the time of sign-up or registration. This gives you a better idea of how to proceed.
Teach them how to use their iPad with Overdrive and the iBook store first. This is the most simple as they can browse and borrow from their library, and browse / buy right from the iBook store right there on their iPads.
If you have students who have other devices you can add a discussion about syncing up their existing books with the apps that are available to them.
A discussion about the many, many different sites that offer ebooks might be a good idea as it provides a segue into discussing format and how different formats will or won't work on their iPads. You then have an opportunity to mention the ability of changing formats but not necessarily going into the step by step details. You can include that in notes / handouts and make yourself available for questions for people who do wish to know about it or who may need it.
Good luck with your class and however you choose to proceed.
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