Plenty of free e-books in Mobipocket format show up fine on Kindle.
Typically ebook readers are larger than PMP's with larger screens. If you're going to read for a few hours, then the screen of a typical PMP becomes pretty eye-straining (due to size, contrast, and brightness).
Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
Non DRM Mobipocket format is already supported on the Kindle - just drag and drop.
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