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I have a 505, and have had around 200-250 books on my reader all the time, and no problems (knock on wood). I load all my unread books on the reader, maybe 10 books a week, and delete the book from the 505 when I have read it. The main library/archive is handled by Calibre.
Just checking... my 505 has 257 books on it (main memory, around 40MB free) in 10 collections, and 17 bookmarks, some books are long ones of 1500+ 'pages' and most are regular 300-600 'pages', some manuals in pdf format are over 10MB in size. So I'd say the 505 is capable of handling a nice amount of books.
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