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To add to what Jon said, what Sony has released so far in an SDK sort of way is an LRS to LRF translator. There are many fine third party tools (including an LRS to LRF translator) that are available today including BookDesigner, libprs500, and PDFrasterfearian (I never seem to be able to spell that one correctly.)
While it is true that you will currently have to ship the Reader back to the states for service, so few have needed service that this may not be an issue. Many of the right handed people complain that the unit seems to have been s\designed for left handed people since the controls for the page turning are located on the left side and are a bit awkward at first for right handed people.
The Reader can take up to a 4 GB Memory stick. I don't have any MagicGate sticks so I can not comment on their use. I have used everything from a 16 MB stick up and they have all worked. (I currently do not keep any additional storage in the unit as the internal memory is more than enough for my needs as I do not use it as a music player ot image storage device.)
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