How to open .lit files
I recently came upon a .lit file and was puzzled at first because I did not have any application installed on my system that could read and display the .lit file properly. A web search told me that it was a format for the Microsoft Reader, an e-book reader for Mobile PCs with another edition available for notebooks and desktop PCs.
The .lit file extension stands for literature and it seems to be rather common on Windows Mobile devices. Since I never have owned one it was completely unknown to me. Microsoft Reader is an old program, last updated in 2005, that is available for several languages and operating systems.
The PC version comes with an optional Text to Speech module which reads the texts out loud if so desired. It is possible to convert .lit files to open standard files by using a program called Convert Lit which is available for Windows, Linux and Mac.
Update: Microsoft has discontinued the Microsoft Reader application effective August 30, 2012. The program has been pulled from the Microsoft website which states the following:
Microsoft has discontinued Microsoft Reader effective August 30, 2012 which includes download access and activation of the Microsoft Reader from the Microsoft Reader website. However, customers may continue to use and access the Microsoft Reader application and any .lit materials on their PCs or devices. New content for purchase from retailers in the .lit format was discontinued on November 8, 2011.
Your best option right now is to convert the lit files into another format. A free program that can do that is ABC Amber LIT Converter which you can download from Softpedia. The program reads Microsoft Reader .lit files and converts them to Adobe PDF, HTML, RTF, CHM, TXT, DOC and a variety of other formats.