Quote:
Originally Posted by kleinste
To perform a factory reset:
From your home screen, press the menu button. Travel to 'Settings'. Once in the settings screen, press the menu button again. There is now an option in the menu to restore to factory settings. Note that your kindle will become deregistered and you will lose all your books, though, so be prepared for a minute or two of work afterwards! 
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That does not remove hacks, and it can make removing hacks even more difficult. You can read MUCH more about this in many posts in the kindle developer's corner forum.