This looks like a classic disruptive product in my view. By definition, disruptive technologies don’t seek to do everything – in other words it is not a computer or pda replacement. What it disrupts is the book and magazine and their corresponding distribution channels. I can already read blogs and documents on my iPhone and laptop. I don’t need a device for that. But I also carry around three or four books and several magazines at a time in my brief case plus get a package from Amazon once or twice a week. Would I pay $399 for a device that allows me to buy books for 50% less than I pay now when I read 20 to 25 books a year. Absolutely. Now I don’t have to store books all over my house. I can annotate on the electronic version. Plus it all comes from a trusted brand who has quite a bit of leverage in the publishing business. Disruptive products just have to be good enough at one or two things. This product does in my opinion. I’m ordering one today.

PDF is conspicuously absent as are other audio file formats. Still, there is a lot here and the device looks promising.

I think some of your questions are answered in the User Guide. Chapter 8, “Kindle and Your Computer” talks about transferring files over USB to the Kindle or (more likely) the installed SD card. The supported file formats are:
“Kindle (.AZW)
Text (.TXT)
Unprotected Mobipocket (.MOBI, .PRC)
Audible (.AA)
MP3 (.MP3)”

Section 8.3 talks about converting other file formats to Kindle format. Basically you email files to an Amazon service and they get converted and sent back. There is a “small fee” to transfer converted files directly to the Kindle over wireless but they can be returned via email for free.

Not sure this is a perfect device but the expenses mostly appear to buy you convenience rather than basic functionality. I can imagine transferring my own PDFs & MP3s frequently – not sure I’d buy a lot of Kindle-formatted content.

Kevin