The main problem with Chinese and Japanese texts is that several encodings for each language were in use before the era of Unicode.
The Cybook uses Unicode UTF-8 encoding. So the trick is to convert the ebook files to UTF-8.
For doing this you need to use 3 softwares. 1. Firefox, 2. a text editor (word pad etc) and 3. Kompozer (a multi-platform HTML editor with versions for Windows, Mac and Linux). Link here:
http://kompozer.net/download.php
Open the txt or html file of the book in Firefox.
If the text is gibberish, go to File/Character Encoding and tick one by one the Asian encodings until you get the correct one on screen. Click on /More Encodings if the first list is not enough.
Once the text appears correctly on screen, do a "select all" and copy to the clipboard. The text you are saving now is automatically in HTML format.
Next, open Kompozer and "paste" the copied text into the new blank screen. Now you can edit the text as you like. Before you do anything you should save the text by clicking on File/Save And Change Character Encoding.
Type in the filename and select UTF-8 in the box below. You can enlarge the size of the title or chapter by high-lighting the word(s) and clicking on the big letter A in the toolbar above the text. You can change high-lighted text to bold, italics etc by clicking on the corresponding icon in the toolbar. Don't forget to save often.
If you want a list of chapters for a long text where you can jump to the chapter by simply clicking on the chapter in the list, this is what you do.
Make a list of chapters at the beginning of the text.
Chapter 1. How to do this
Chapter 2. How to do that
etc.
Go down into the text. Find chapter 1 or whatever you want as a chapter and highlight the word(s). Click on the anchor icon to create the "anchor" and type in a name such as "c01" "c02" for example in the box which opens.
After you have done this to all the chapters, go back to the chapter list at the top of the text. Find Chapter 1 and highlight it. Click on the chain icon to create the "link". In the box which opens, click on the down arrow on the right of the box in "Link location" and select the text which you have typed for chapter 1 eg. "c01". Click OK. The word(s) will now appear in blue, which means the link has been successfully created.
Create the links to all the other chapters and you have an active chapter list.
Don't forget to save often
The HTML file you have now created can be used in "MobiPocket Creator" directly to create a .prc file usable on all MobiPocket readers.
It takes a lot of time to do the chapter links so I usually leave it out on novels that I know I will read only once. However if there is a text which you consult often and need to scroll around a lot, putting in chapter links would make sense.
Next you need to install the relevant fonts on the Cybook itself.
For Chinese I find SimHei the most legible.
For Japanese MS Gothic is the one I use.
Connect the Cybook to your computer and copy these True Type Fonts to the Fonts folder in the root directory of the Cybook. Next you have to delete the "font_cache" file in the Systems folder (don't worry, Cybook will create another one with the new fonts when you turn it on again).
After you have done all the above and turned on the Cybook, it will take many minutes of waiting (while it writes a new font cache) before the library screen appears again. Just be patient.
See other threads on MobileRead for advice on fonts and their installation.
I am aware that this might not be the easiest or quickest way, but at the moment it is what I use.