In addition to the stock readers, with their highlight/annotation support, you can add Koreader, with its highlighting and
Evernote export plugin.
The
features list with some additions since it was last updated (like a text search, pdb, png and other format support, wireless calibre support).
There is also a port of CoolReader and a number of utilities and games, that can be added to the Kobo devices.
An install guide.
Luck;
Ken