The Kindle stores annotations in sidecar files next to the book, named {book_name}.mbp1 -- transfer those together with the book, and the Kindle will recognize the annotations data. AFAIK these should be compatible with any Kindle. On newer devices, the .mbp1 will go in a folder called {book_name}.sdr/ together with the .apnx (page numbers) and .phl (public highlights), the X-Ray data, etc.
AZW3 books use .azw3r and .azw3f for annotations instead.
My Clippings.txt is totally different -- it is a logfile and every time you make a note or highlight or bookmark data is appended. One consequence is it still contains annotations that have been deleted.
The Kindle itself does not parse My Clippings.txt to find out the annotations.
