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It can't convert it if it's locked by DRM. If you unlock it first, which is very do-able but we can't talk about it here, then Calibre can convert it just fine.
I have both a Kindle and an iPad and the only features the Kindle has which are missing on the iPad are text to speech to read the story out loud to you, and the ability to organize the books into collections.
Places to get the books for free, legally, include the public library (I belong to four public libraries which lend ebooks; with some fiddling on the level of your above question, you can read them on the Kindle) and a few social websites which facilitate sharing of Kindle ebooks which are lenadable. You could also start a review blog---if you want to review a book, you can often get it for free by requesting from the relevant parties.
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