One big "pro" for epub is that it is easier to change the displayed font.
For LRFs, you have to either embed a new font (which slows down page turns) or you can re-flash your device with a new font built into the image (intimidating to some users and difficult without support from a forum like Mobileread). In both cases, the reader needs time to re-paginate the first time it displays at any particular font size unless you use Sony's library software.
For epubs, on the other hand, you can embed fonts, but you can also point to fonts on the filesystem of your Sony reader. There is no delay to repaginate when you load a book or change font sizes.
On the con side, my gut feeling right now is that Sony's LRF parser is currently more robust than Adobe's epub parser on the Sony reader.
I've been using epub, but more and more I've been considering rolling my own PDFs.
Note, however, that the only books I buy are DRM free and easily convertible.
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