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I think it really depends on the type of books you're looking for. I'm mostly interested in physics and math books, and the formatting on those is atrocious. Equations are butchered- subscripts and superscripts are hit-and-miss, Greek letters are often confused (nu vs. English v, eta vs. English n, psi vs. phi).
After several conversations with Amazon, I can shed some light as to what happens with typos. When I see a book with so many typos that it's pretty worthless, I send an email to the kindle feedback email address that clearly lists the mistakes, along with approximate line numbers. That list gets forwarded to the publisher, who can then decide whether or not to remove the book and "fix" it. The "fix" is in quotation marks because I've had them remove about a dozen books, and none of them have ever reappeared. Most publishers are actually pretty good at removing the books, except imprints of Elsevier.
However, the downside is that because Amazon doesn't make the ebooks themselves, they don't fix them, so you're at the mercy of the publishers. So if you say, hey, the phi at line 45 should be a psi, you're not going to get a fixed version. At best the book will disappear from Amazon's website. I imagine that if you've purchased it you'll get a refund. (I've always sent lists based on the free previews.) At worst, the publisher says, eh, it's not such a big deal and leaves it.
As for books without equations, I've heard that they're much better, but haven't really gotten that many myself. Hope that helps!
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