Kindle 2 doesn't read PDF at all. You can convert them to Mobi format, but the conversion will depend on the PDF. Text based PDF's a lot of times convert OK, but PDF's with a lot of graphics can be tough. I haven't used Calibre or Amazon to convert a PDF so can't comment on how well they work. I've had decent luck using either Mobipocket Creator or by saving the PDF as HTML from Acrobat Pro and using Book Designer.
Yep, Amazon books can be downloaded to your computer and/or copied off the Kindle to your computer.
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