An interesting read on usability of the Kindle Fire and 7-inch tablets in general. The key takeaway: A 7-inch tablet is different enough from a 10-inch tablet and from a mobile phone that it needs to be treated differently when designing UI & content.
Kindle Fire Usability Findings (Jakob Nielsen’s Alertbox)
Mobile web sites work best on the 7-inch tablet. Users had great trouble touching the correct items on full sites, where UI elements are too small on the Fire screen.