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Internet Explorer is required to download LIT files. When you click on "Create Download Link", you should be redirected to the same page but in place of the "Create Download Link" button, you should get a "Download" button instead. Clicking on that button would automatically open a pop-up window that would download the LIT file and import it directly into Microsoft Reader's library.
On my computer (Vista SP1), the actual ebooks are stored in:
C:\Users\<user_name>\Documents\My Library
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