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I would advise using the Waterstones site directly, rather than through the silly Sony software. Waterstones are quite expensive for some ebooks though - its worth googling/checking prices in a couple of other stores like fictionwise before buying.
Calibre also gets my vote. I don't use the library, just copy all my ebooks over direct to the Sony Reader drive on my PC and use Calibre to verify.
I'm sure the library works well but - its just I haven't worked out the best way to use it yet.
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