Kindle can view many types of files, but the mobi, prc and azw are the ones that download correctly as normal Kindle books. (These must, of course, be non-drm'd ebooks). Even though the K3 supposedly reads pdf files, you can expect an error message if you try to download pdf books from the Dropbox.
Once you have picked the ebooks up from the dropbox, they reside on your Kindle so you do not need to download them again.
Thanks for the mobile link. Hadn't thought about using that as the regular link worked so well.
cheers
my link:
http://www.dropbox.com/referrals/NTMzNzQ2MjE5