By using the swiss-army knife of CLI image processing, ImageMagick, to properly scale & dither down to the (nearly) exact palette of colours supported by the eInk tech.
For ref, the default settings:
Code:
convert Alloy\ of\ Law3.png -filter LanczosSharp -resize "758x1024" -background black -gravity center -extent "758x1024" -colorspace Gray -dither FloydSteinberg -remap ~SVN/Configs/trunk/Kindle/Touch_Hacks/ScreenSavers/src/linkss/etc/kindle_colors.gif -define png:bit-depth=8 -quality 75 "BR_MBSS_AL.png"
(Don't mind the crazy path to the colour map, I'm on a laptop, the file is shipped with the hack).
(The same kind of results can be achieved with any decent image editor, if you're somehow allergic to CLI

[But, FWIW, I just did that on OS X with IM installed via Homebrew]).
TL;DR: Yes, it usually ends up looking way better than what the default reader does, but it's also an order of magnitude slower

.