I was getting more and more frustrated by my Kindle's missing typographic capabilities that I made the switch to PDF as well. At first I was using a rather complex workflow of Calibre, rtf2latex and manual tweaking of the LaTeX code. But now that I've learned of Jellby's excellent PDF conversion tool using Prince I'm using that instead.
Newer versions of FBReader are doing a good job with kerning and ligature substitution. Hyphenation is OK. It seems not very popular though, I don't know why.
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