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I'm nearly up to 600 books on my Kindle with no problems whatsoever. It's not slow at all and there are no glitches. It really feels as fast as when it was brand new and I just had a few books downloaded. The only difference I can see in speed is that inputting a search term and waiting for a result across your entire book library takes a little longer which is as I'd expect. Normal reading usage is the same in my opinion.
I initially loaded up about 500 books on the Kindle in one go while plugged in via USB and it took 5-6 hours for the whole lot to be indexed. While it was indexing all the books, I really just left it to get on with that task.
Now the bulk of my books are on the Kindle and are indexed it works like a dream. So I would recommend adding books in batches but being aware that the larger the batch, the more indexing required. But once that's out of the way, why shouldn't the Kindle work ok?
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