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Do PDFs scale to mobile phone sizes? I've tried reading PDFs on my phone and it's possible, but not a pleasant experience.

No, PDF is basically digital 'paper.' However, publisher-end tools and workflows can produce multiple PDFs from the same content for different form factors.

HTML5 and related technologies probably have the most promise in this sector though due to the large amount of cross-device styling and customization that can be done with CSS3 and JavaScript.

PDF's don't even work well on my Kindle, let alone my phone. Half of the PDF's I have for research are taller than my screen at a readable size, but inexplicably two-column. PDF is not the ultimate solution to portable documents.

Did you mispell 'HTML'?

>PDF's don't even work well on my Kindle, let alone my phone.

Then your Kindle is not a full featured reading device. The Kindle's opted to imitate a black and white textual book (the e-paper thing), when future ebooks can are will be much more than that.