I do believe I'll leave it at that. Enjoy,
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Just confirming the parent post above that the Sony Reader does do ePub format. It does PDF as well, although that can be more frustrating than not; on a device with a smaller screen like the new Reader touch, enlarging the font does not reflow the page with PDFs. You end up being stuck with single pages with a sentence or two on them (at the size I read), unless your eyes are exceptional.
Unfortunately, the local library has far more PDF offerings than ePub, and far more DRM'ed Windows Media content than anything else.
I'd rather just believe that it's done by little elves running around.