@Akirainblack: None
. (The -w/--unwrap switch is another thing entirely, it strips the package signature header from a signed ota2/recover2 package. It's a convenience feature of a somewhat limited use ^^).
Code:
kindletool convert update_kindlet-jailbreak-20121007_install.bin
kindletool create ota2 -d pwgb update_kindlet-jailbreak-20121007_install.{tar.gz,.bin}
(manually expand my shiny brackets construct on the create line if you happen to use a crappy shell
).