I recently purchased an ebook of Daughters of the North from HarperCollins.com after hearing lots of good things about it. I downloaded and activated Microsoft Reader first, then downloaded the LIT file from HarperCollins (you have to use Internet Explorer to activate Reader and download the ebook). So, after downloading it, I opened it up in Microsoft Reader and looked through the first few pages. It looked nice, but I really wanted to read it on my PSP, and to do that, I needed to extract the text out of the LIT and convert it to another format.
First, I downloaded ConvertLIT (you can get a GUI front-end here). You need to run the ReaderKeyRecoveryTool first, which will prompt you to open the file in Microsoft Reader. It grabs the key and saves it in the directory. After that, you can use ConvertLIT to extract the files from the LIT file, getting you a pretty HTML file. From here, you can use a program like detagger to turn it into a TXT file, or use any number of programs to convert it to PDF.
From there, I dropped the TXT right on to my PSP and opened it up with Bookr. Hooray!