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I use MS Word for creating RTF files. I have never had the Reader "reset" itself the first time it loads an RTF file.
As for formatting, the only advantage that plain text has over RTF is that it is a smaller file size. A plain text file uses the default font, default font size, and shows no font attributes such as bold or italic. All of these are possible with RTF. Other formatting items such as horizontal rules seem to get lost with RTF.
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