More complex answer:
The PRS-505 software runs on an embedded Montavista Linux kernel. Linux has device drivers that can indeed recognize and use SDHC cards, depending on the card reader interface supporting SDHC ... however it's possible that Sony left out SDHC software support when they built their stack, on the order of 3-4 years ago.
It might be possible to use SDHC cards on a PRS-505 in future, with new firmware or new operating software (such as OpenInkpot). It isn't possible to do so at this time, however.
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