Calibre (which has its own forum) will convert just about any DRM-free ebook to LRF or ePub for the PRS-700. Also, it is easy to strip the DRM from LIT and MOBI (and eReader) if necessary.
The only major downside to the PRS-700 is its lack of dictionary support.
If you want a MOBI reader, then I suggest the Bookeen Gen3, rather than Hanlin, because it has dictionary support and a better text display engine. Note that LIT is very easy to convert to MOBI using Windows MobiPocket Reader (or Creator), or the command-line mobigen for batch conversion.
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