Your PDF problem...simple fix, if you're willing to spend $11.
GoodReader ($1) for viewing/importing/managing files and PDFs (God I love this app)...and from there, you can send PDFs into iAnnotate ($10) for extensive marking, highlighting, noting.
I'm going paperless for college next semester, books gonna get scanned (yes, it will be a pain) using OCR software...handouts will be downloaded from college server to GoodReader, notes taken on there using BT keyboard with Pages and syncing to my desktop with PadSync (pwns the **** out of iTunes file sharing).
Term papers might still be done on my iMac, though, because of screen space and better Pages functionality (markings, references...)