There is confusion about Kindle's DRM policy. If you haven't read these, and care about Kindle and DRM, please do. Try not to get too worked up though.
DRM sucks and I don't like it. I'm not going to try to defend DRM in general, but I have a guess as to what is going on.
Audible.com's DRM policy is that you can have your book on 2 computers and 3 devices at any one time. You don't have to register devices with them, so it is possible for me to loan you an audible book by putting it on your mp3 player. Of course this is dangerous. If you like, my adults sons have done, simply DO NOT BELIEVE that I have to remove the book with my computer so that that I can have that copy back at my disposal, I am no able to have it on no more than 2 devices at one time. If you have your books on two different computers and they both crash and burn, you can call audible, tell them what happened, and have the DRM re-set.
And if you are going to have DRM at all, you do have to have some such policy, or the DRM doesn't actually do anything.
The problem is that Amazon's policy for DRM is not clear, and that is a big problem.
Right now up to six devices can be registered on one account. They also have to share a means of payment. My husband's new iPod Touch is on my Kindle account. He can read any on my books if he wants. Theoretically, a book club of people who really trusted each other could all buy Kindle's, put them on one account, and share copies of a one purchase. (They would need to be careful about syncing or backing up their comments and bookmarks though. The system is set up to assume one person is using all those devices and each sync will over-ride previous information.) Did I mention they have to trust each other?
There is nothing on the web site about temporarily putting a device on your account, but someone must have thought about this. It appears that I should be able to register your iPhone to my account for a limited time so that you can read one of my books and then unregister it later. Of course, while you are registered I have to trust that you won't access the account and buy a boat load of books. I imagine that if I was in the habit of registering and de-registering devices at an alarming rate, or if a particular iPod was getting successively registered under different accounts, Amazon would notice and do something about it. (BTW, when you de-register a device Amazon wipes it. Don't believe anyone who is trying to sell you a used Kindle with pre-purchased books).
Anyway, all this could we worse. iTunes doesn't allow purchases to be downloaded more than once. You break your device and don't have a backup? You lose your music.
Now of course, if there is DRM there will be limits to how many devices a book can be on and/or how many times you can download it. That is what DRM is all about. One should also expect that if you are allowed to download a book more than once, it is probable that sometimes there will be a glitch and you will need to call customer service and have them reset the count on your books.
What is unacceptable is that Amazon does not have a consistent policy, or even a clear way to learn the book-by-book policy.
Update: Amazon's response is...