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Here's some further details I've gotten (some of this is from iRex, some is my own speculation based on what they said).
If you opt for the Adobe support, the Mobipocket viewer will be removed. (Sounds like you were right HarryT). That means you choose one or the other. You can't have Adobe DRM and still keep non-DRM Mobipocket.
Regarding dictionaries. Yes, the current dictionary support is linked to Mobipocket. They are working on a dictionary solution that uses Adobe, but it will probably not be available during the initial release. So at first, people using the Adobe firmware will loose dictionary support until that is implemented. That means if you need the dictionary feature, then stay with the Mobipocket firmware until it is added to the Adobe firmware.
Regarding updates. Unfortunately, it sounds like the Mobipocket firmware will not get further updates. They will continue to make it available for users who prefer Mobipocket support, but future updates will only be on the Adobe version. According to the exclusivity clause in the Mobipocket licensing agreement, iRex is unable to support two different DRMs on the same device, even if they're in separate firmwares. I think what that means is that once they start supporting Adobe they have to stop development on the Mobipocket version. They can't offer a firmware choice on the same device as a way to get around the exclusive licensing terms. It's OK to offer the existing Mobipocket firmware because it predates the Adobe support, but they aren't allowed to update it anymore.
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