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Well, Amazon shipped me a new Kindle 2 overnight and it's working fine so far. All my archived content was downloaded to the new Kindle quite quickly. My subscriptions didn't roll over automagically but when I went to Amazon.com, I was able to ask that future deliveries be made to the new, working Kindle. I'm sure that'll work fine.
So, overall, not such a negative experience as it seemed it might become. Last two times I had to call, hold times on my call were under 5 minutes.
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