The app won't let you actually load an ebook directly; apparently you have to trick the app. Joe eventually figured out that he had to rename the ebook he was trying to use so it matched the same file name as one already in the app. He also had to fiddle with the cover images and replace the ones from the replaced ebook.
He did get the ebook to load, yes, but that sounds like far more work than I would want to bother with.
And then there's the other problem he found:
If you feel like following my hacking example to load .mobi format books onto the Touchpad's Kindle App, be ready to have to reload it. If the app has a problem parsing the book for any reason, you are done. With no back gesture on the Touchpad, there is no way to back out of the crashed book load. Each time you start the app, it will load the file into a crash situation. (This doesn't crash the Touchpad, just the app.)
Um, yeah. If the Kindle app is this much of PITA just to load an ebook, perhaps it might be better to get something not running webOS.