I followed the upgrade steps and it worked fine. Next I copied over a PDF of an issue of The Black Gate. They sell single issues as PDFs, and I had it on my hard drive. The file was 8 MB so I didn't want to pay to use the wireless delivery service (15 ¢ per MB). Presto! Amazingly, not only did my Kindle read the file, but it treated it differently. When you open a native PDF, the book menu includes "Go to page" instead of "Go to location." You can also search the text, but you can't make annotations or add highlighting. You can't enlarge the text, although you can rotate to landscape. Unfortunately, The Black Gate page is too big to read easily on a Kindle 2 screen; I imagine it would look fine on a DX. I will have to see if I have a paperback-sized PDF to try.
As a bonus, I seem to have gotten some new screen savers. The birds were familiar from the Kindle 1, but the Ralph Ellison picture was new and extremely well rendered in gray-scale.
Isn't competiton wonderful? As soon as the Nook came out, Amazon launched Kindle for PC. And now they've added a few really spiffy new features, not just for folks buying new Kindles but for those of use who had already forked over whatever the going rate was at the time.
Assuming Amazon eventually opens the Kindle up to EPub, it will be easier to get non-Amazon content onto it. But after all, the reason they came out with their own reader is so we would be stuck (if we were lazy) buying books from them. Even if they do go out of the Kindle business in a few years, so what? As long as it still works, I can still read the books. They will have sold enough of them that will will want to keep selling us all books. That's what happens once you have a Kindle: you buy more books.