Hey, Elltrain, welcome to MobileRead.
You've actually asked a pretty involved question ... well a real answer will be pretty involved, anyway. So here goes.
Let me start by pointing out that you can use RTF on the Reader, so anything you can get into that format (like, say, HTML files that you've opened in Word/OpenOffice and saved as RTFs) will load right up. The only caveats there are that the Reader's RTF engine doesn't support in-line images (they just don't show up), and you'll most likely find that you need to increase the font size before you load the files onto your Reader. Most folks find that ~16 points is about right.
For PDF files, your best bet is something like PDFRasterfarian (recently renamed just "Rasterfarian"), it cuts the pages up into sections that fit the Reader's display. However, if your PDFs are locked (and it sounds like yours are not) then I don't know if it'll work for you. If you can re-make the PDF files, then sizing them to the Reader's display is the best way to go. Generally, though, most of us have reached the conclusion that PDFs are just a ... sub-optimal option.
For .LIT files, there are a number of apps that'll convert them for you. And you may eventually find that you prefer to make versions of your source files in BBeB/LRF (that proprietary format). I didn't care anything about it at first either, nor did most folks around here, but we've found that we can make our own files quite handily with BookDesigner, and they tend to be smaller than the original RTF's, with in-line pix to boot. Just something to keep in mind.
Here are some references for you, the
e-book conversions section of the Wiki is a good place to start, and the
formatting BKM for the Reader is another good reference.
Once you've got a bit of a handle on that, you can do some searching around the forum for RasterFarian and BookDesigner, or whatever else seems like a good option to you.
And, of course, you should feel free to ask questions on stuff that doesn't make sense to you, or isn't obvious -- the folks around here are quite knowledgeable and helpful (not to mention polite

), which is a rare combination. Somebody always seems to have the answers to most questions, and if not, there's usually folks who will help figure the answers out.