Wow, this is great!
I just started bouncing around the idea of using a R-Pi with Kindle on the R-Pi forum the other day, with no response yet. To find you guys working on it here is great news!
Thanks hawhill for the x2x tip! I was also wondering if it might be possible to just share X in that way without doing the whole VNC thing, although I have just been reading that in some cases VNC is actually faster... Seems counter-intuitive.
Once we get the display sorted out, it's just the beginning. There is a wifi card to be hijacked, and a filesystem to be mounted over the usbNetwork. Finally, but it seems too ambitious, there's a whole extra CPU sitting there...