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The iLiad supports the most formats on an E-Ink device (MOBI with DRM, PDF, and about a dozen DRM-free formats via FBReader, including LIT via a pre-processor). It does not support Word, but FBReader handles RTF.
However, off-device conversion is also a viable option. The Kindle does this via Amazon servers, Calibre does this for Sony devices on any Desktop, and Windows MobiPocket Reader is one approach for MOBI.
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