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You only get "Prime benefits" if you buy a Prime membership. I assume that you are talking about the new book borrowing thing, for Prime members (one book per month).
The conversion service is free (or you can use Calibre yourself to convert). The converted documents get onto your Kindle via wi-fi (or 3G if you have a 3G Kindle, and pay for the service, $.15/mb). For text-only documents, the conversion is usually ok.
I believe that you can attach more than one file at a time for email conversion.
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