I wish they would make a sticky for this. Kobo will only read books you download from Kobo. There are several ebook apps (Play Epbu, Book Reader, et al) that will read non DRM encrypted ebooks. there are several legal sources for DRM free epubs and other formats. Calibre will convert from one non DRM format to another. If you search the forums you can find a list of websites for DRM free books.
Book Reader app works well better than kobo doesn't look as nice but at least you can copy and paste, and import books of various formats, but of course kindle rules the world of ebooks, you can email drm free books of certain formats to your kindle account and read it on your kindle app, that is if you don't mind jumping to the OS2 beta and side loading kindle, nothing else like kindle out there!
There are many free Android apps that are far better than anything on PB. Hopefully OS2 will let us have some.
Meantime, the best free PB app for epubs is Booksonwink. It's in the app store.
Booksonwink works, sort of. Some of the controls don't though, can't change the cont size though. Blackberry needs to develop a decent, feature rich bookreader for the Playbook