Out of about 325 books in my Kobo account I've had eight or nine where the formatting was messed up, not too bad really I guess (I always download the ePubs). For those books the messed up formatting consisted primarily of missing italics and some missing punctuation. The problems in those books were unique to Kobo when checked against samples from B&N and Amazon.
My problem wasn't so much the formatting problem which could be fixed as it was the way Kobo support handled fixing the issue. For the first six problem books my support ticket went in Sept 20th 2010 the issue was resolved (with 5 books fixed one refunded) June 10th 2011! Note that I was the one who ended up contacting the publisher and getting them to send new files (which they did within the first week of the issue) it took Kobo a few weeks to update the books on their servers, but apparently no one thought to "refresh" my account so I just kept getting the same bad files until someone figured it out nine months later after I pestered them for a resolution time and again.
The other couple books I've had formatting issues with have simply been refunded as I don't think they want to deal with me pestering them anymore.
I don't know if those ones eventually got fixed or not although the publisher said they'd send new files.