As a general principle, isn't it true that the Kindle 2, which runs a variant of Linux, could just as easily be made to run Android? Although without WiFi, you'd have to figure out a way to capture 3G wireless fees.
Alternately, why not update the Kindle 2 with a better folder organisation system and add non-drm epub?
Also check out the very nifty Android 2.0 Tablet Delyca has in prep .. and it would run Kindle software, yes? http://www.delyca.com/index/viewArticle.php?id=1124