Debbie--
You can read books off the memory card, you do not need to use the Sony software.
I'm pretty sure the only audio files that the reader will read is mp3--so the iTunes mpeg4 wouldn't be compatible. (This would include audio books.) That said, the Sony Reader really isn't your best choice for audio files--they run the battery down quickly, there isn't really any easy way to create playlists or tell the reader which order you want it to play the audio files in, and it's very easy to leave the audio player on when you're not using it--draining the battery unexpectedly. Also, I'm not sure if the Sony Reader will remember the position you paused when listening to an audio file...not important for music, but when you're three hours in to an audio book, it's a pain trying to find where you left off.
Any pair of headphones with a standard connector should work with your Reader.
Glad you're enjoying your reader!! I've had mine for a year and a half, and now I wonder how I ever got by without it!
dordale
