The way the epub module is set currently, the headers get set to mimetype/octet-stream instead of /epub - technically accurate, since an epub is pretty much an overspecified zip folder. Depending on what you're using to download from the site, the file gets downloaded as work.zip (especially mobile browsers and IE), which leaves most ereaders confused.

The coders are aware of the issue, and there's a fix on Github for the testers to play with, so hopefully it'll be addressed soon!