ADE2.0 does not work properly with Sony PRS-350 (and with many other ereaders); especially with Overdrive library books.
There are various workarounds, but the easiest solution is to install the more reliable ADE 1.7.2.
Version 1.7.2, it is a little difficult to find, available on Adobe site for Windows and for Mac.
http://helpx.adobe.com/digital-editions/kb/cant-install-digital-editio ns.html
The forum software is sometimes corrupting the link above. There shouldn't be a blank in 'editio ns.html'. The following redirects to the same page: http://tinyurl.com/diged172