Plenty of free e-books in Mobipocket format show up fine on Kindle.
The Kindle only allows the reading of Amazon DRM-protected content.
Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
Granted the PDF converter seems to have some trouble with graphics PDF's, but for books the converter works very well.
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.