Study the icons next to the numbers to learn what to do. The magnifying glass on the 8 key is zoom (magnify).
The fact that it even reads word files in a decent fashion is amazing. No other reader does as well. Yes there are only 2 zoom levels as it maintains the page format from the word file. I agree that it could learn to wrap the paragraphs but this support has not changed in several years. You can certainly make word files with larger font that will work very well in this reader, as apposed to the Sony 700 that can't read them at all.
Each format is a bit different and a few don't work all that well with larger files but all in all the mobi works well. Palm DOC works well. Check my
Hanlin eBook formats in the wiki for a start on the differences.
Dale