There are no restrictions on DRM-free MOBI, but you would typically need to use a 3rd party reader.
Robertb's blog says MOBI (PRC) is supported:
Quote:
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It supports: txt, pdf, doc, chm,wol, rar, zip, jpg, bmp, tiff, fb2, djvu, gif, epub,html, ppt, prc, pdb, MP3.
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It would be nice to get confirmation that this isn't a typo, because the latest LBook (Hanlin V3) beta firmware has dropped MOBI support entirely.