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There's more to this issue than merely format conversion. There is the issue of DRM (Digital Rights Management), and it is the big issue.
First off, Calibre is quite capable of handling the format conversions necessary. There are only a few, somewhat rare, number of vendors that distribute ebooks, free or for sale, in proprietary formats that Calibre can't convert.
Second, it is generally considered legal for you to convert formats for personal use. Third, Amazon has no qualms with you acquiring books from other sources and loading them on your Kindle. Their syncing software ignores anything other than books you've bought from Amazon.
Your problem will be DRM. Most books you purchase will be burdened with DRM. These books can't be converted to other formats, at least in their original state, and can't be used on devices or reader software that isn't "matched" to the file.
There are a few vendors which sell ebooks without DRM. Most of these will offer the books in a Kindle compatible format (usually Mobipocket format .MOBI or .PRC files) so that conversion isn't necessary. When they don't offer either MOBI or PRC files they generally offer ePub or other formats that Calibre can easily convert to MOBI for use on a Kindle.
Technically, most types of DRM can be stripped from ebook files and the resulting stripped files can be converted to other formats using tools like Calibre. Removing DRM is questionable from a legal standpoint and this forum does not allow discussion of DRM removal methods. Don't ask for help in removing DRM here.
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