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The Kindle uses MobiPocket DRM. Each Kindle has a unique "PID" (an alphanumeric string) which Amazon know. When you download the book to your PC, you have to specifiy which of your registered Kindles (if you have more than one) it is destined for, and the file is then encrypted for the PID of that specific device. It's no different to downloading any other DRM-protected Mobipocket book; not sure why you say that the publishers wouldn't like it?
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