Cindy K,
Yes, I bought two Kindles. One for me — Kindle DX, the bigger, more expensive one — and the Kindle 2, smaller one (the basic Kindle that is under $200 now) for my daughter.
The DX can read PDFs natively, that is, no conversion is needed. You just drag it over to your Kindle via USB. Voila! The ability to read PDFs was a big selling point on the DX for me.
To read PDFs on a regular Kindle (K 2), you do have to convert the file. I’ve not done that, but it is possible.
Note — many of the Kindle’s features are not available within a PDF. For example, the search function and the dictionary function are not accessible within a PDF.
I do admit, though, that the books purchased from Amazon are easier to navigate than any free books I’ve gotten from Gutenberg, Archive.org, and even the freebies at Amazon. So when you pay a dollar or two, you often get a linked TOC and such features. It’s a give and take, and we’re still experimenting with lots of options for our Kindles.
I really, really like my big DX and do not regret the cost one bit. WELL worth it for US. (We also live abroad, so getting books is expensive and difficult and requires long waits).