The PRS300 can read LRF, ePub, PDF, RTF, and TXT. For RTF, it's good to start with a very large font size--I use 17 pt; some people prefer 20 or 22.
The .lit and .html files can be converted with
Calibre or Sony's library software. (I recommend Calibre.) You don't need to convert the TXT files, but it's nice to have the metadata (title, author), and you won't get that with TXT.
The sort-by-author doesn't work that way. Sony's sorting is limited. AFAIK, all the ebook readers have limited sorting functions that nobody's really happy with. However, you can use Calibre or the Sony Library to create collections, which allow grouping the way you'd like the authors to be grouped.
(And if you think 60 books takes a while to sort through... I keep over 400 on my PRS-505.)