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The typical eBook is perhaps 300-400kb in size, so 4GB will probably allow you to store in excess of 10,000 books. Given the Kindle's poor organizational facilities, that's almost certainly more than you're actually going to want to store.
Of course, if you're reading 50MB page scanned PDFs, it's a different situation, but there again the Kindle is far from the ideal reader for doing that.
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