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Hacker Igor Skochinsky used DRM to load Mobipocket books onto his Kindle. Using a series of scripts, he's able to convert eBook files to Amazon's AZW format and then add the necessary serial number DRM, specialized per an individual's particular Kindle.

The hack allow ENCRYPTED Mobi files to be read on the Kindle. So you can buy a DRM-protected mobi book and read it on Kindle.

Plenty of free e-books in Mobipocket format show up fine on Kindle.

DRM is not to prevent other files from being readable on the Kindle.

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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.