The iLiad is a frustrating device in many ways. Its software has huge potential that iRex never had the resources to exploit, page turns can be a bit slow and the ~12 hour battery life (with no sleep mode) is ok but far short of other EInk devices. However, the larger screen really does make a difference and the software is "good enough".
On my comments about the Hanlin MOBI. This is good enough for most ebooks, and I think what happened on this particular CHM is that the numbers written to the screen to indicate which key to press for each link are obscured by the icons before each link. So this may not be as bad with other CHMs, and you may be able to guess its numbering scheme after using it for a while. I have screenshots from a Kindle on the same MOBI from CHM
here.
The other option is to wait a while to see if the devices with 9.7" EInk screens that are likely to appear this summer are a better fit to your needs. Jinke will also soon introduce a 6" device with a touch screen.