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OK. I tried it again. I was looking at the section where it showed the books on My Device and the sync settings.
If I go to the My Books Library I can drag and drop a file into the Books library and then drag and drop it into my phone. If the phone is connected I can drag the book from the library to the left edge of the screen and a drawer pops out listing the connected devices and I can drop it onto one of those.
I just updated Itunes a couple of days ago so it should be the latest one.
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