I see that it can retain MP3 format for audio in general. Does this mean I could download an audio book to my computer and then to the eReader as one would for an MP3 Player and iPod?
If so, does that mean I can directly purchase or download an Audio Book on the eReader?
Thanks 
Not sure if it helps, but would you consider to get the Amazon Kindle instead? It has the text-to-speech function, which means it can read books to you aloud like audio books. You can get audio books on the Kindle as well.
BTW, Amazon just announced new models of the Kindle reader. I’ve mentioned quite a lot about the new Kindle, which model to choose, and also where to get millions of free books, in another answer here:
http://answers.yahoo.com/question/index?qid=20100730192050AAMa0pH
Hope it helps