How do I transfer ePub files to my Kobo eReader?
Currently the Kobo Desktop Application only allows you to transfer books purchased from Kobo to the eReader. For ePubs you can use one of the following methods: 
Preferred METHOD 1 - Drag 'n' Drop: When connected to your computer by USB the Kobo eReader shows up as a USB storage device. Drag and drop ePub files from your local hard drive to the Kobo. 
METHOD 2 - Calibre: Calibre is a free sotware application for Windows, Mac, and Linux. After you have downloaded an ePub, PDF, LIT or other format ebook to your computer, Calibre allows you to 'add' it to your computer's Calibre library. The software allows you to convert from one format to another, add cover art, and modify the layout of the ebooks to some extent. You can then transfer this library to your Kobo, either all at once or one book at a time as you add them. If you replace your Kobo or wish to clear it out, you can reload the ebooks from Calibre. Separately, you can still use the Kobo software to purchase, maintain, and download your purchased ebooks. The Kobo's library will be the sum of the libraries you have on your computer. 
It is important to note that Calibre CAN be used to MANAGE ebooks that are wrapped in various forms of DRM, but it cannot be used to open/view protected ebooks or convert them into other formats. To add a DRM protected ebook to your Calibre library, download the protected file with the appropriate client software if necessary (Adobe ADE, Sony Reader software, etc), locate the file, and import it into Calibre like any other book. 
METHOD 3 - ADE: Adobe Digital Editions is a free software application for managing ebooks. ADE can be used to transfer ePubs to your Kobo eReader.