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There's not really a good alternative to position:absolute. It's a very basic, very critical part of the CSS specification. What you should avoid doing is using it to specify a page-relative absolute position, because that will not necessarily behave in the way you might expect, but this should be obvious to anybody who has ever done any significant amount of web development, making that warning from kindlegen pretty pointless.
FYI, my drop cap CSS on Kindle uses position:absolute, and I haven't seen any problems from doing so. AFAIK, neither has anyone else. I wouldn't use absolute positioning in KF7 code, but as long as you're only using it on the KF8 side, it should be safe to ignore the warning.
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