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Personally for me, I like a case with padding so if I accidentally drop it, something could absorb the shock.
As for gym-reading, I've never thought of bringing my kindle to the gym. But based on the fact that I like padding, and the Amazon Kindle Case doesn't have much padding (although it covers all parts of the kindle), I wouldn't go with the Amazon case. Plus, like you said, the hinges may be a problem. I haven't heard of anyone complaining about the hinges breaking the 3rd-gen Kindle, but I'm afraid of it.
This might not fit your treadmill idea but I use a slip cover. When my kindle's traveling I have it in the case for protection and when I'm reading, it's naked. I like how the kindle is small and feel that a case may add bulk to it (like a silicone case).
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