I can't agree more: when you've got a display that's just under 5" high by about 3-1/2" wide, half-inch margins sure eat up a lot of viewing space. I bought a couple books through the Sony store, and I wasn't impressed. So, now I just buy the LIT versions, enhance their "conversion friendliness"
and run them through calibre.
I buy most of my books through Webscriptions, and Arnold does a damn good job formatting Baen's LRFs -- much better than Sony, IMO. Though, lately, I just download the LITs and convert with calibre -- I've gotten pretty good at tweaking calibre's settings so I can customize the output to taste.