Hi ,this is much easier than I expected.
Boot tablet up
Connect factory cable and you will be asked is you want to enable ADB Debugging (windows XP)
Open as terminal screen
Type adb reboot recovery
When it reboots into recovery select Erase everything
Eventually it reboots to the standard installation screen with no demo software installed.
I put the XP reference as the message don't appear if connected to the Win7 laptop.
Also you need something later than XP to access the KIndle as a storage device which I'm you already know.
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