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The epubs on Kobo native render correctly and much the same as on Sony, Nook, Binatone and decent apps, because it's the Adobe engine.
The kepub is a proprietary Kobo format. It allows tap on an image to zoom and popup notes (sometimes). But it doesn't correctly render 12 pt as 1 em (it renders margin or font in pt too large), it's not so good on letter spacing. So I only use it to test how books might look supplied from the Kobo store (they'll take epub2 source and deliver kepub to customers). I read all ebooks on the kobo as epubs.
Some people prefer kepub and some epub. I only read novels/fiction as ebooks (I don't count PDF as ebooks) and they rarely have footnotes at all (I admit popup notes are good, but don't always work anyway) and don't ever need the images to be enlarged.
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