Originally Posted by Sirtel

Three, at least for an eink Kindle.

Plain MOBI: covers, but not custom fonts, custom font sizes or the boldness slider. Syncing across apps and devices if you use Amazon Cloud.

AZW3 or MOBI/both: custom fonts and font sizes, and the boldness slider. Syncing for MOBI/both, but not for AZW3. Covers for AZW3, but not MOBI/both.

KFX: enhanced typesetting, adjustable right margin and other newest bells and whistles. No syncing and no custom font sizes.