Plenty of free e-books in Mobipocket format show up fine on Kindle.
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.
The Kindle has many flaws, but it does allow you to read a few different non-DRM formats.
Hack let you convert encrypted Mobipocket files that were intended for another reader so that that work on Kindle.
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.