The AZW format is essentially the same as MobiPocket's MOBI format.
There are no technical issues with support, only marketing ones. Amazon has decided to only directly (i.e. via amazon.com) sell e-books to owners of their Kindle device, and only in AZW format tied to specific Kindle devices.
If you have a Kindle, it is possible (though probably not legal) to buy AZW e-books, break the DRM, and read the resulting DRM-free MOBI file on whatever device you want. However, you can't even buy a AZW e-book without owning a Kindle.
The last set of statistics I saw suggested that there are relatively few fiction e-books available for the Kindle that are not also available in MOBI or LIT format (there are more non-fiction titles for the Kindle than other devices though). Amazon's price for e-books is sometimes lower than other sources, but you are buying a product tied (in principle) to a single kind of device.
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