Well we have quite a different view on what advanced formatting is in this case (I see the same issues with reflowable formats than llasram).
When I have a RTF file on my reader and it's lacking hyphenation, zooming in and out is pretty much useless for me, the justified text is way too ugly for my taste with all these whitespaces around.
HTML is not a specialized form of XML, XHTML is, and XHTML formatting options are not suited for e-books either (the same can be said for CSS).
E-books will not be "platform agnostic" as easy as music files, if you just think about reflowable formats without the fact that it'll be rendered on all kind of screens, you'll never get any e-book as good looking as a real paper book. We'll need advance formatting that reflowable formats do not provide (at least yet), that could be software based or file based. It's not a fight for reflowable formats vs page-oriented format, it's about finding a way to keep the best of both worlds.
I see too many people screaming around that PDF is dead. Well, as long as no reflowable format provides similar formatting features, PDF won't be dead. When such a format appears and start being widely available for mobile readers, then both reflowable and page-oriented formats that we know of will be dead.
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