Orwell2k, I had exactly the same experience! I am now in my third email to waterstones (about the same book), and only getting generic "we care about you" responses. I bought a book with a lot of french names and phrases inside, and they were all completely unreadable. I sent them a very characteristic screenshot - I actually would have given me double the book price back if I was in their place and saw the state that book was in...
Anyway, I regret not having complained before, because of course it was not the first book with errors, just the worst.
If it was a paper book we of course could have returned it at once, but it seems that returning an ebook is another of those rights that are not self-evident in the digital world