If you have the "folder view" enabled in the library, you need to navigate right up to the top level of the file system, at which point you'll see two folders, "CyBook" (the internal memory) and "SD Card" (the memory card). Select the latter, and then navigate down the tree to wherever you've put your books.
It would be better, by the way, to ask such questions in the "CyBook" forum; a lot more people will see them there!
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