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how does this work exactly? you email the document to your free.kindle.com address and you can access them while in your amazon account and download via usb to kindle?
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No, the documents are just emailed (as attachments) to the email address your Amazon account is registered with. The same one you log on to Amazon with, and the one your order confirmations go to.
Besides that... yes, you're correct. you transfer the file via usb to your Kindle.