I've never really been happy with the DjVu software I used.  (I used the free online service at http://any2djvu.djvuzone.org/ to test out the file format.)  I realize it's a lossy compression, but for black & white scanned text images, converting from PNG to DJVU butchered the display.  Sure, the file size was just a few kilobytes, but it was terrible to look at.  Colored pictures fared much better--the quality was reduced, but not nearly as badly as it was for B&W pictures.
 
I don't know what the software from LizardTech is like, but I imagine it wouldn't kill the display quite so much.  Unless we can find a way of keeping a relatively high quality for the DjVu pictures, I'd support using an alternative (like TIFF, although that might produce MASSIVE file sizes if we link 600 pages together into one file).
 
Z