Welcome to MobileRead. Always good to have another Sony Reader member.
Congratulations on the price. $105 direct + $50 credit is great.
As for eBooks outside the CONNECT store, many of us are hard core fans of
Gutenberg and
ManyBooks. Both of which provide many classics in open source files and ManyBooks also provides books in LRF for the Reader. Another developing site for fine formatted bookes is
FeedBooks. All are well worth a visit.
If you are a Science Fiction fan there is a whole shelf of SciFi available as a downloadable CD from Gutenberg and over 9 CDs worth of material from Baen plus their own rotating free download section at the
Baen Free Library.
There are also a number of sites that offer DRM free books that can be loaded. You will find many of the authors here at MobileRead. One that I have gotten a few books from is
Steve Jordan. Last time I checked he was even offering two titles for free.
There are also some additional conversion utilities available on the
MobileRead Wiki Conversion page that may assist you in getting the formats exactly right for the Reader. If you go with RTF, be sure to checkout Stingo's Word Macro. I have had great success with BookDesigner that produces LRF files for the Reader that are about 1/10th the size of RTF files.
Hope that this helps you get started.