Overdrive shows Kindle listed on the approved list as "Beta" and epub and pdf books available for use.
Amazon's "Help" page says it's active. One catch (there's always a catch) is that books can't be wirelessly downloaded by 3G, only Wi-Fi. Anyone with a K1 or K2 will have to sideload library books. My library site hasn't updated with a Kindle link yet...has anyone else's?