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We're also dealing with two different subjects here (and trying to get O'Reilly to clarify any of his doom-and-gloom speeches is another matter entirely) ... and both of these subjects return (in some part) back to EPUB ...
1) Opening up the Kindle - Currently, the Kindle only supports only 3 ebook formats, Amazon-DRMed Mobipocket (AZW), non-DRMed Mobipocket, and plaintext. In this day and age (and considering how long EPUB (and OEB) have been around) not bothering to release a firmware update to support more formats, more standard formats, more format standards is just plain bad PR, but Amazon is hoping they can rely on their weight within the market to allow them to dictate their terms (as they already have with some small presses attempting to release on the Kindle).
2) Opening up Amazon's ebooks - The classic selection of worries that surround any DRM - What if Amazon stops making Kindles? What if Amazon stops making ebooks? What if Amazon changes DRM? - We've already seen it with Microsoft shutting down their DRM servers for MSN Music and telling the customers to F off. Being able to get hold of your ebooks in formats (with or without DRM) that can be read on the other readers on the market. Even with DRM, Mobipocket-DRMed Mobipocket or eReader-DRMed eReader would allow a slightly larger safety margin for users should Amazon ever bite the big one.
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