The Kindle DRM wasn't hacked to REMOVE the DRM from Kindle purchases, but added to other books so that they too could be read on the Kindle.
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.
Amazon can do a lot of money only from selling kindle, like Apple does with the iPod.
Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
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