You're correct that the Kindle cannot be used for free ebook downloads from libraries. That's the reason that I chose to go with a Barnes and Noble Nook (purchased three days ago).

I chose the older Nook ( with wifi access) rather than the newer Color Nook because of price and the fact that the LCD screen on the Color Nook is not as easily read in bright light and is more reflective (info from reviews I read, not personal experience). So far I'm quite pleased. One little hiccup initially with reading the library downloaded books on the Nook, but worked out ok with help of a Google search. Feel free to contact me if anyone has a similar problem.