Once you download the files, you have to move them into the B&N directory structure, but there's a place ("My Files" iirc) for them.

And the children's book thing I kinda understand, because they have some kind of enhanced format for kid/toddler books that has sound and turns its own pages and so forth. (I don't really think that giving a spensivish electronic device to a kid who still chews on pages is a particularly good idea, but I'm glad that isn't part of the regular functions. Also, they probably have to do something to prevent data collection/sharing by the under-13s or run into federal law...)