Format wars

I am working for a small publisher who would like to begin offering
the ebook as a more prominent option to their clients.  I have been
researching available formats and have come to the conclusion that
EPub and PDF would be the most consumer-friendly options due to
cross-platform compatibility and ease of creation.
Now, I come to the community with a couple questions:
1. Are there any major disadvantages to the EPub format that I may be
overlooking or anyone has run into?

2. I am aware Kindle does not support Epub but also that there are
available conversion tools available.  Is this something that is
practical for a small publisher to work with?

3. Is Adobe InDesign the software of choice for creation of the XHTML
and navigation files associated with EPub creation?

4.  What costs would be involved in EPub creation and distribution
other than creation software, distribution and registration?  Is it
fair to say it is cheaper to create a PDF vs. an EPub or vice-versa?  

Thanks and any input is greatly appreciated.  My main goal is to make
an informed decision regarding format so we can commit to something
and offer the best options to our clients.

One final question, is it hopeless to attempt to find the optimal
format when things keep changing?  (half-joke)

Thanks for any help in advance!


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