Hi Simon,
I have just spoken to Michael myself, and what a helpful guy he is! Got my books emailed in ePub format and they are fine.
He said that they are selling a lot of the DRM free books, and I told him it was a definite selling point for a lot of people. However, for the time being he has this advice for you all:
Don't buy the books in Microsoft Reader format!
They are having problems with the format at their end, but whilst they are working on it, you will get a more reliable experience using the other formats.