How can I tell if I my e200 is version 1, 2, Or Rhapsody?

I suggest you go to your library (or libraries) and see  exactly which format it offers. Then check out  Overdrive and NetLibraryand see what their FAQs say about the compatibility of Sansa units.  On this NetLibrary demo

it looks like NetLibrary uses .wma, which is one of the formats that the Sansa does play.  Overdrive’s devices page

says Sansa are supported.  

Still, each audiobook format carries certain restrictions. They may time out. They may not work with certain players. They may resist copying.  Sansas play .mp3, .wma and (version 2) .aa files. Anything else needs to be converted to .mp3. You may need to use Windows Media Player to transfer over these audiobook files–not just drag and drop them–because WMP can also send over digital-rights information to unlock the restrictions. 

You could find out exactly what the file format is, including the file extension, from your library–or just download a book and see what it is. Then use Nero or look at the list of formats in Media Coderand see if it can be converted to mp3.

The cheapest Sansa player you could get would be the Clip.  It’s got a small screen, but it’s supposed to have good sound.