MobiPocket DRM has been broken, but the software to do so (which also explodes non-DRM .mobi files) isn't widely available. So for routine format shifting, .LIT is your best bet.
The advantage of using a DRM scheme that isn't secure (.LIT or .MOBI) is that it provides insurance for the future. For example, in the past Amazon has withdrawn from the e-book business and discarded all on-line copies of their e-books. So if they ever closed down MobiPocket, you would still be able to format shift your existing .mobi e-book files to new reading devices.
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