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I just noticed this fading issue in person. My mother's Kindle 3 (she's had since release day) was giving her problems and when I was checking it out I noticed something was rattling inside and whatever it was must have been metal as it would cause the device to reboot itself sometimes. So I set up my old K3 which due to it being a replacement is about 8 months newer than hers. The difference between to two is night and day, the newer one has hugely better contrast.
Of course now I've fixed hers (some mainboard screws had come loose and were rattling around inside), but she wants to keep my old one instead since the screen looks nicer.
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