Originally Posted by j.p.s
When I try that, it takes me to books containing that letter in the text of the book.
No. Typing a single letter from the home page will take you to books whose title (or author, depending on the current sort order) start with that letter. Typing more than one letter will indeed do a search within the book.
The Kindle actually tells you this itself. Type, say, the letter "F" in title sort order and it says, in the search box at the bottom of the screen "click to go to F titles". Similarly with authors in author sort mode. For obvious reasons, it doesn't
work if you're in "most recent first" or "collections" sort order, because there is no "ordering" in those modes.