The Reader has a "flat" file system and it's somewhat tedious to deal with a very long list of books. Most of us have, for that reason, abandoned the idea of using a large memory card to carry around our entire book library with us, outwardly attractive though that idea may at first be. In fact many of us have abandoned the use of memory cards at all - the Reader has about 92MB of internal memory (yes, I know the Sony site says 64MB!) and compresses files that you put into main memory extremely efficiently, which means that you can store 100+ "normal" novels in main memory, which should be enough for even the longest trip. Given the file system, you really don't want to deal with many more files than that - believe me
. Another reason for not using a memory card is that you get significantly better battery life that way.
What I would personally suggest is that you use your PC as your book "library" and only keep a few dozen books on the Reader.
To answer your original question - the Reader only "re-indexes" a memory card if it detects that it's been replaced. A Reader never really "turns off"; switching the power off just basically blanks the screen and disables the buttons, so when you switch it on again it's an instant start-up and you're exactly where you were when you switched off.