I don't know how this one slipped by me all this time.
Sony has a 43-page PDF about how to create PDFs that are optimized for viewing on the Sony Reader.
Even though the screenshots and instructions are for Windows, PDF is PDF and these instructions are probably also applicable for people who create PDFs with Mac OS X or Linux. It's worth a shot.
I think this is a must-have guide for anyone currently offering -- for free or for pay -- their writing as PDF files. The Sony Reader has the possibility of being the major player in eBooks due to its openness.
Right click and Save As this link.
I was going to post this Saturday, but held off to consult with an expert. I've been told that despite the new PDF text reflow capability Sony recently added to the Reader, these instructions still stand as the best way to do Sony Reader-optimal PDFs. In addition, for ePub files that contain graphics (charts, photos, drawings, etc), customizing the ePub file to the size of the Sony Reader screen will ensure the illustrations don't go all screwy when rescaled to screen size. PDF and ePub files are generally, I believe, formatted for 8.5" x 11" paper printing.