UPDATE on using Sony Library and Calibre.
Firstly I want to thank everyone
for for their helpful tips and advice etc. It works!
I am now successfully using both Calibre and Sony Library. I had already formatted my Reader twice and didn't feel like doing it again, (and since I already had quite a few books in Calibre
and already on my reader, and only wanted to download a few freebies from Sony Library) I left all the Calibre books in the Reader and transferred the Sony/Google books onto the SD card.
Result - perfect!
I know the other way around was suggested, and it makes far more sense. I
will probably do that in the future, but for now.... all it well!
So, yes! Sony Library and Calibre
does work together. I even experimented by adding Sony Library books, (as Starrigger suggested) to the Calibre library, just to see. That works too, but then some of the covers were lost again and new ones would have to be added. Not that that is a problem, but I'll leave it as it is for now. Sony books in the Sony library, all other books in Calibre.