1.4 GB Storage... HA!
I decided to load up my Kindle just to see what would happen. I loaded over 2000 files but still had over 500MB left. Amazon sent me an email telling me that I was out of storage on the K2 and I needed to delete some files so that they could send content to my K2.
I double checked and I still had over 500MB showing as free in both Windows Explorer and Calibre. I deleted a few files and now Amazon sent me the content.
So, this means that you effectively have far less than 1.4GB storage or maybe it's also limited by the total number of files. I'll have to move some MP3s over and see what happens.
Still wish I had my SD slot.