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Mobi books created with "Book Designer" do indeed have that issue. Most people uploading books these days, however, are using much better tools. Try anything I've uploaded in the last 3 or 4 months (eg any of the Dickens or Austen books) and I think you'll find that they work just fine on the Kindle, have working contents links, properly-sized illustrations, cover pictures, library information, and everything else required to make you a happy bunny. Try downloading, say, the version of Thackeray's "Vanity Fair" I uploaded a few days ago and take a look at that. Great book and I think you'll find that it looks just fine on the Kindle.
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