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I received a PRS500 from a friend when he upgraded to the 700....I was able to authorize the 500 without a problem. It just gave me a message that it was already authorized to another account, was I sure I wanted to authorize it for this account. I said 'yes', and it worked without a hitch.
Not sure if this would make a difference, but I already had two devices (my computer and my PRS700) activated, and was just adding the new device.
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