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You can use ePub and PDF on the device at the same time with one exception. If you borrow from your local library a PDF and an ePub and load them both on the device, only the one you last loaded will be readable. If you borrow library books and only load one format at a time, either PDF or ePub, then you will not have any issues.
Example, BOOKA.PDF AND BOOKB.EPUB are borrowed from your local library and loaded on your Sony Reader. One of those books will be readable and the other will say 'Protected Content'. It is a flaw with the Sony firmware and Sony is aware of it.
As to which looks better, definitely ePub will look better on your Sony. PDF ebooks will have to reflow and result in weird page breaks and quotes/conversations that run together. I usually do not buy PDF ebooks but only use them if they are free, like my local library.
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