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Hi Lizzy, I'm also in the market for a reader, so I've been digesting a lot of information about this kind of stuff as well.
TXT and RTF files are file extensions that mean "text" and "rich text format" files, respectively. These are very, very basic feature-poor formats. One could say that TXT offers absolutely no features at all, since it's just raw text at its rawest.
If you want to see some example TXT file, just google for "readme.txt", and click pretty much any of the hits. It's all monospaced and very basic. RTF actually looks pretty nice, it supports formatting and other more word processory things, but it's still pretty basic. No special support for annotations or columns. Or print-accuracy.
I'm personally looking into readers, too. I don't view Sony's lack of mobi support as a crippling feature. Sony does offer epub support (which is a comparable, emerging standard), and more importantly, it supports DRM'ed PDF's which could come in very handy for me. If you're reading for pleasure--selecting your books based on availability--mobi has a better selection (currently) and seems like a nicer experience that is more tailored to the capabilities of eBook readers, but if you need to buy specific books, PDF (often DRM'ed) is the most ubiquitous and therefore, more "flexible" to me.
That said, I'm still a bit ignorant with how different types of PDF will look on the Sony devices. I'm hopefully going to find out within a couple hours, as I'm going to make a trip to the Sony store with a properly formatted SD card with PDF's to see how the readers cope!
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