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I know adding a number of books definitely slows down my Kindle and quickly drains the battery. What I received my replacement Kindle and charged it I immediately added my SD card with around 600 books and left my Kindle on all night. It wasn't plugged in and was totally drained by the next morning.
Haven't seen any freezing but mine is still 1.0 and I'm most likely at the end of the queue since the update was announced right after my replacement Kindle arrived and the replacement is 1.0 (I checked).
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