First off, I don't think thousands of people are having problems. I think it's mostly those who don't follow directions well and it's compounded by overload on the Sony Servers.
Follow the advice you've been given above and you'll be fine.
oh, wait...
When you initially downloaded the book from Waterstones, how did you do it if you didn't have either Sony Library or ADE installed?
Oh, one other question. Is this a new Sony or used? It may have been registered already, from one of the messages you say you are getting.