I have had no margin problems with the kindle and have converted 8000+ books for my mother's kindle 3. Of course I have not viewd all of them but a random sampling of 200+ reveals no problems.
The books I converted were 90 % in epub format for my Sony. epub is my default output. Probably doesn't make any difference but so far has worked flawlessly.
I no longer have the kindle as I sent it to my mother, but kindle for pc shows the books as fine.
Perhaps it is a kindle setting on the kindle itself?