I'm thinking the offer is "Amazon Prime gets you free express shipping on all your orders from Amazon for only $99 a year. Sign up before X and we'll send you a Kindle absolutely free."

Think of it: Prime increases average customer value through the freaking roof, since it causes people to move non-Amazon spending to Amazon. Kindle is the same way. They have complementary value propositions: get what you want faster and cheaper. Prime is a subscription billing service, too, and a Kindle in active use might as well be.

Too complicated, just sell the Kindle for 99$. Easy to understand, easy to gift. Bundling Prime with it makes it harder to gift.

ps: I let me prime subscription expire in the hope that it would make me buy less stuff on Amazon. No shipping costs really does make it easier to buy.

I just got Prime free as a student and it is very addicting. Almost anything you want is a sweet sweet 2 days away. My bank account is not as happy...

Come Christmas season 2011, the e-reader market is going to look like the MP3 player market in 2005. You're going to see Coby-branded e-readers with horrible silver-painted plastic and 90s-budget-PC industrial design at Menards on Black Friday for $29.95.