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The .mobi extension means that the file is a Mobipocket eBook.
The .PRC is in fact a Palm software application container. It can contain a MobiPocket eBook, but it can also contain totally unrelated things.
I think you can use both on your iRed devices, you just need to be sure that the .PRC is an eBook.
It's the same for .PDB format, which can contain eReader eBooks or simply be a Palm database container.
Feel free to correct me if I'm wrong, I'm just writing this off the top of my head without looking it up.
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