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Not sure if this is relevant but I know that iPhone OS 4.2.7 was just released and if you upgrading maybe that is causing issues? Just a guess. I have jailbroken my iPhone although from comments I read earlier that is not necessary to get the synch to work. I did it for other reasons.
Given there is no jailbreak for 4.2.7, I have not upgraded my OS at this time. Synching between Kindle and iPhone is still working for me with no problems.
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