If you go over to
www.fictionwise.com you will find that they have an excellent tutorial on ebooks and they discuss all the different formats that are available. That should be a big help.
The two most popular formats for commercial ebooks are MobiPocket and eReader. Each format requires its own reader. Many ebooks you can buy have no encryption. As a matter of fact if you look at the vendors you will find that most of the books are not encrypted.
The two most popular encryption formats are MobiPocket and eReader. MobiPocket is tied to your machine and you are allowed to use the book on three different machines. If you change machines after that you have to send them an email to reset your account. It works pretty well, but is a pain if you change machines a lot, like I do.
Therefore I prefer to buy ebooks in the eReader format. The decoding key is the credit card number you used to buy the book. With this scheme you can use as many machines as you want, you just have to enter your credit card number the first time you read the book on a new machine. I find this to be easy and simple and buy most of my ebooks in eReader format whenever I can.
Hope this helps.