The most common format is the palm document format. This is the equivalent of the *.txt file on the PC.
Mobipocket uses an encrypted format that you can purchase ebooks in mobipocket format. Also special formatting of fonts, bookmarks etc.
Mobipocket reader can read mobipocket format ebooks and palm documents. But cannot read other secure format ebooks (such as peanut reader or palm reader format). Likewise, other formats cannot decode mobipocket ebooks.
Mobipocket is "average" as a ebook reader. Despite the fancier fonts and hi-res, it is a bit user unfriendly and slow in use.
Another popular secure ebook reader is palmreader (they have a better selection of ebooks too!).
Other generic ebook readers are TealDoc, Isilo, TIBR (this is free - do a search in Palmgear) and so on.
If you want to go to a good site for ebooks to purchase - have a look at www.fictionwise.com
- they have an explanation of ebook readers and different types of secure format readers.