Excellent points Jack Tingle. The Kindle 2.0 can read books to me and play MP3s, but I still can't display a Drop Cap, or flow text around an image like the images found in Alice in Wonderland, or display an ePub document, or display a PDF (even if it was designed for an 800x600 screen). Furthermore, poorly formatted books missing working tables of contents, indexes, covers, backcovers, images, italics, em-dashes, etc. are all quite common.
The blame for not providing support for standards like ePub and PDF lies squarely on the shoulders of manufatures like Amazon, but even poorly formatted books can be laid at the feet of Amazon as well. If they provided the tools to easily produce a nicely formatted ebook then there would be fewer badly formatted books. But maybe the next version will allow you to make phone calls.
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