Software update for Kindle 3 KB can be downloaded directly from Amazon web site
http://www.amazon.com/gp/help/custom...deId=200529700
It has been released in September and you have download and install instructions here
It supports KF8 i.e. AZW3 - nearly all the kindle books I have been buying since the update are the .AZW3 format and some of my old purchases which were .MOBI/.AZW when I re-downloaded them after update were .AZW3
It works like a charm