For my part, I've been surprised how well the 505 handles pdf's natively. I usually zoom up one font size from default, and though it takes about three 505 "screens" to get through a pdf page, the pages turn fast.
There's usually a ragged-right margin, and if it's an image-based pdf or one with extensive formatting, it's another story, but overall it's plenty readable and I haven't had a need to covert most my pdf's. In fact, I tried using Calibre to convert one of them to lrf and it made the formatting worse.
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Sometimes I'll find an old LIT file I have and I'll convert it to both LRF and epub and the epub looks better.
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All of my .lit's I've converted to .lrf, and they look OK. Does epub usually look better for .lit files?