The mobi format sucks because its old and outdated. They've tried to update it (improve the compression, DRM, etc. when Amazon purchased it) but its just a major pain the butt for formatting. Especially when it comes to <pre> <tt> sections which reading anything for, or which has to do with, code...well you get my point (It truly is just bad). The mobi format is fine for regular books though; I mean, its been used for years for that so...
If you get a eReader I recommend the Sony. They read the ePub format, which is "open" to BTW, and is far better for code related reads.
Just for the record: eReaders are nothing like reading on the screen. I love my eReader (just wish i could have afforded the good one).