Good question! It really depends on how well prepared the document is. If there are a lot of graphics or tables, it can be a challenge. However, if it is mostly just text, then it can be made to work pretty well. I use an add in from Microsoft to convert text to .lit files. You can download it here for Word 2000/2002.
http://www.microsoft.com/downloads/details...&DisplayLang=en
It does a pretty good job on text, but it can't handle complex tables.
As far as readability on the screen, I find it easy to read. The pages are short, as you might expect, but it is readable. For example, a book I am reading was about 500 paperback pages, but on the PCA in .lit format is almost 2000 pages (screens).