Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
DRM refers to the fact that you can't view Amazon Kindle books on other devices (including your computer), or on other Kindles - i.e. no sharing, the purpose of DRM.
Amazon can do a lot of money only from selling kindle, like Apple does with the iPod.
If you read some of the Kindle discussion groups, you'll see people complaining about "no backlighting", and then a few days/weeks later they will be lauding the fact that it has no backlighting.
A revolutionary portable reader that wirelessly downloads books, newspapers, magazines and blogs to a crisp, high-resolution electronic paper display that looks and reads like real paper, even in bright sunlight.