It would seem that this is an issue that's not going to be resolved anytime soon. It's a pity that Amazon.com don't issue a warning (as far as I know thet do not) prior to buying a Kindle that UK readers will face an issue downloading books from their site
On a positive note though, amazon's kindle applications for PC, Ipad etc are great in as much that I can read a book on one device and pick up where I left off on another.