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What Windows MobiPocket Reader does is import an ePub and export (and display) a MOBI. However, its support of ePub is very poor (e.g. you will loose the TOC). I suggest using Calibre for ePub to MOBI conversion. It does a good job, and bugs get fixed very quickly.
The Calibre approach won't work if you want to add DRM, since (strangely) MobiPocket Creator will not import MOBI.
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