I was just reading a few minutes ago that there was a new Kindle for PC update out today. I was ever so hopeful that I might be able to use this update to finally fix the problems I've encountered. I downloaded it.
It's actually not a new update. This one has been up as a manual download for a few weeks now and the only change today was that you will be prompted to download it automatically.
If I were you then I wouldn't download it. A fair number of people at MobileRead have had trouble with this specific update; it's not just me. It seems like the update doesn't like certain hardware. But since it's not clear exactly which devices will break the update the best option would be to avoid it entirely.
That's a pity. I'm told it has better collections support and some new Shelfari options (I would have loved to test them).
But if you have installed the udpate, you can find instructions on how to fix it here.