[experienced problems submitted a comment - hence the two almost identical submissions....]
I gave up trying to get kindle working with CrossOver v9.1 on Ubuntu 10.10.
I then tried downloading the latest Wine development version (1.3.7) (from winehq.org) and installed it (installs fine in parallel to CrossOver).
I was then able to run 'wine KindleForPC-installer.exe' from the command line prompt, and Kindle installed successfully using an XP bottle.
It subsequently synced correctly with both purchased and free books.
No need to apply any of the tricks or older Kindle versions.
:)