The trick is ... avoid PDF files. I understand that the new firmware (in conjunction with Adobe DE) will give you some capability to reflow PDF documents. But the screen shots I've seen indicate that it's not really satisfactory.
Instead, get yourself some books in the Sony native BBeB format. There are well over 1000 of those here at MobileRead, free for the downloading. Also, with certain book creation tools such as
calibre, you can convert books from other formats to the BBeB format for your Sony Reader.
Oh yeah! I guess I should also welcome you to MobileRead. It's a nice place to hang out and you should find lots of help from the smart folks.