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My english skills are far from that level to decide which dictionary is better MW or Oxford, but for me, the MW en->en dictionary seems good enough, however the translational dictionaries are not.
Strictly quantitatively, the Kobo's English dict has about 80000 entries, the (print-version) Oxford English has 600000, so that's obviously more comprehensive (is that really the one on the Kindles, or the Kindle edition is different?)
The replacement of the dictionaries is not supported, but possible. Preparing the dictionary format which the Kobo can handle requires to be able to write some text parsing scripts.
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