This is all interesting. If you'll excuse the slight hijack, is anybody dissatisfied with the default dictionary? I think it is pretty good, but still a somewhat odd way to display only certain words.
The old Rocket eBook had one where one could highlight the word (touchscreen, of course) and just that definition came up. The troucle was that it was so basic, that any time I did not know a word, the dictionary didn't either.
I don't see any way that could be implemented on the Kindle, though.
I'm perfectly satisfied with the one we have now, but if others were available at a reasonable price, I'd be interested in trying them.