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Peter has it right as usual.
I download books from my library all the time. Here are the steps in the process:
1) Checkout and download from the library
2) Connect the Kobo Reader to the computer
3) Open Adobe Digitial Editions, and use it to open the downloaded file
4) While in Adobe Digitial Editions, drag the book from the file to the reader
5) Close ADE
6) Undock the Kobo Reader
At that point, the Kobo will process the new file, after which it will be ready to go.
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