Yes they do.
Code:
[root@kindle /etc]# ln -s /usr/share/zoneinfo/Europe/Berlin /etc/localtime
[root@kindle /etc]# date
Mon Mar 5 17:57:58 CET 2012
The only additional thing you have to do is copy your respective zoneinfo file to the Kindle (I used the one from my Ubuntu PC), because the Kindle comes without those files.