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Just so you know, no need to capitalize "ebook". It isn't an acronym.
Basically, how ebook lending works, is that you're given a copy of the book with an expiration date (normally 2 weeks from date of checkout). After the expiration date, you cannot read the book. The library buys so many copies of each ebook, just like with paperbooks, and when ever a book is checked out, a record is kept as to who checked it out (just like a paper book).
Most ebooks that libraries offer are in the ePub format with Adobe Adept DRM, which is not compatible with Kindles (Blame Amazon, they're the ones that put the restriction). If you strip the DRM, you'll also break the expiration date, and quite possibly be breaking the law depending on where you live (also, we won't tell you how to do that).
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