I had tremendous problems with version 3 of the software, which have all evaporated when I reverted to 2.5.
Incidentally, I positively decline to buy a kindle until they are sold from a UK warehouse (so that I can avoid the import charges) and until Amazon have a decent selection of books at sensible prices in the UK.
I first adopted electronic reading as a way of cutting down on the thousands of books in the house. I've now converted almost all my public domain books and given the treeware versions to charities. To be honest, I'm not too bothered if I buy the occasional paper bestseller, so long as I can save space with the classics.
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