I would recommend converting PG text files into RTF. There's a nifty Word macro you'll find in the conference Wiki which processes a PG text file into a nice RTF format for the Reader. The advantages of RTF over plain text are many. Eg:
1. You can set the font size to whatever you wish (Reader's font size for text file is very small!).
2. You can set the title and author fields so it catalogs nicely on the Reader.
3. It's easy to apply extra formatting for titles, etc.
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