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Not sure what's happening, but it does work. I just downloaded a book today. Your best bet is probably to sign out/in or factory reset. Might be something with the database.
I agree that searching for a book is painful, but if you know what you want it's the same a buying a book on the device and not that painful. The one key is to change the "show" parameters in the bookstore to "Overdrive only".
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