I have prs-505 and confirm that lrf is the best for this device. In my opinion I found that before converting (and from lit to lrf works really great) is better to set the font size to 9,5. Infact, in this way, I had more or less the same ammount of pages (in s size) compared with the paper version of the book.
For the moment I use the sony software to upload the lrf into the device because (and i don't know why) if I use calibre for the upload, I have a delay before open the book and a reformatting delay when zooming, with sony software no delay at all.