Calibre over compresses jpg bookcovers in epub's. It uses the equivalent of about 29 compression in Paint Shop Pro 9. I don't like to go over 10 compression when an image includes text. Otherwise, too many artifacts.
Knowing an epub is just a zip file, I can go in and replace that bookcover.
rtf vs epub
My Sony Reader will read rtf files.
However, the file size is much larger than an epub and it loads, formats, navigates much slower.
Text sizing is smaller initially and also when I use the zoom larger feature on my Reader.
No bookcover image with an rtf. I prefer using thumbnails instead filenames on my Reader.
All in all, it is much better to convert an rtf to an epub with Calibre and then send it to my Sony Reader.
Bold the text helps with the dull touch screen on the Sony.
And remember to strip out line spacing and para indention with Calibre. It just hogs too much display space.
Increase contrast and sharpen helps images look better on the dull touch screen.
I think there are only 8 levels of grayscale on the Sony 600.