I noticed the other day that a new update (version 1.2) had been released for Kindle 1.0; apparently, it had actually been released back in January, but Amazon hasn't did too much to promote it.
Upon installing the update, I noticed a few changes. The pages turn faster, the Internet loads quicker, and there's a somewhat mysterious feature called "Sync to Furthest Page Read"...I'm guessing that this is what Amazon was talking about when they said you could read a book on Kindle 2.0, save your place, and finish it on Kindle 1.0. The added feature makes me wonder if perhaps Kindle 1.0 will be able to talk to your cell phone in the same way that 2.0 is allegedly supposed to.
Aside from thousands of new books, Amazon has also recently updated its store to include a few new magazines (notably The New Yorker and Narrative Magazine), as well as more regional newspapers.
See also my blog about free books (new ones, not classics) on Kindle.