Version 1.7.11 has been uploaded to support azw3 files in collections.
This is basically the patch NiLuJe provided to support azw3 and pobi file types. It includes support for the hack on Touch models. It does NOT enable the Touch to use collections for un-hacked Kindles, so no change there.
Sorry it took so long - been busy with Sigil, and had to re-install my Kindle after it locked up on upgrading to 3.4 to test this version