As for using txt files, while it's true that they often (usually?) have hard-returns at the end of each line, making for strange line breaks on the Sony Reader, there is a terrific program which does an excellent job with all the Project Gutenberg files. It removes all the single hard-returns so that there's only the hard-return at the end of each paragraph, and makes using the text files a breeze.
I have the Blackmask DVD and I must say that I'm surprised at the size discrpancies between the same books in txt format from PG and in LRF format from the Blackmask DVD. It seems that about half of the LRF files from Blackmask are smaller (by a factor of up to 3:1) but some are larger by a factor of about 1/3. I haven't spent any time investigating why this might be, but I think it might have to do with extensive tables of contents in some books which the Blackmask LRF files seem to have turned into large fonts with lots of empty space between the entries.
I don't have the patience to compare the different files side by side, but those I have checked at least have the same opening and closing paragraphs.
So it isn't always that LRF files are smaller.
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