Whats a good e-book reader that can use the ebook formats most public libraries use?”
I wouldn’t put any money into an e-book reader yet. They are definitiely cool and an up-and-coming technology, but the market is so immature that no one standard format (or even approach) has yet become prevalent. PDF comes closest, but as you noted in your question, there is .mobi, and it seems like every manufacturer and his brother is promoting their own format. Worse yet, they are all playing games with DRM (Digital Rights Management) – which is another way of locking you down to that particular vendor’s way of limiting how you use the download. Each of these companies is trying to handcuff you to their technologies. I think that a univerally recognized and share format and approach to copyriht management is at least 2-3 years away. If you buy a device now, keep in mind that you are being jerked around by the e-book market, and that your particular device may be obsolete in a year or two.