Not so simple about Cyrliic. Go to amazon.com and search for "kindle cyrlllic". You'll get dozens of hits on books from Webster's Ukrainian Thesaurus Edition (Kindle Edition). In each book annotation word Ukrainian appears as Ukrainian (Cyrillic Script).
These books are in English but apparenly some (internal? embedded into book?) script is used to display Ukrainian characters that are actually a superset on Cyrillic. Does it mean that even Kindle (not 2) can somehow display Cyrillic?
Edit: just found this Wiki article http://wiki.mobileread.com/wiki/AZW#Topaz
. Looks as these Webster's books are in Topaz... Amazon should put Topaz converter in public domain.