http://www.amazon.com 95,000 or so titles, instant download, easy.
www.gutenberg.org 20,000 or so titles - mostly classics or things that no longer have copywrite. Multiple languages. Three are links to other sites that boast a total of 100k titles. ***, ****
www.freekindlebooks.org This is a site that has mostly gutenberg books in a kindle ready format.
www.worldlibrary.net 400,000 titles - classics, modern, government, multiple languages, all the ones I tried were free. Requires $8.95 yearly subscription fee, consider it the cost of a library card.*, ***, ****
www.fictionwise.com offers both unencrypted and encrypted .mobi files. Full range of reading and many free books as well. *, **, ****
www.mobipocket.com lots of titles, most you can find on amazon.com in the Kindle section for less.
www.webscriptions.net This is Baen books and mostly SiFi. None are encrypted, many are free, and can be transferred directly to your Kindle. Choose Kindle compatible for the download. ****
www.wowio.com uses .pdf format. **, You will need to register and can download up to three books a day, free. Only available to people in the US, due to copyright and licensing restrictions.
www.fictionpress.com 900,000 Mostly original works, as in unknown, normally unpublished authors. Some good, some not, take your chances, you may discover the next JK Rowling. Displays in text. Cut, paste and email to yourself, or save in .txt file and upload.
www.manybooks.net 20,000 titles or so. Has a Kindle format. ***, ****
www.mnybks.net - an extension of Manybooks above, but if you access it through the basic WebBrowser in Kindle, you can download directly to your Kindle, the way you would an Amazon book. Choose the Mobipocket format.
www.feedbooks.com Share books, self published books and a make it yourself newspaper. With a little manipulation of the tools below, you can get your own newspaper, you could probably even directly email it to your Kindle in the morning if you allow that site to send you stuff. You will need to register, but there is no cost. There is now a "Kindle Download Guide" from www.feedbooks.com includes links to many classics, including many in foreign languages.
www.ccel.org Christian centered works. Available in pdf, word, and text, all readily transferable to your Kindle.
http://www.munseys.com about 25,000 books, classic and contemporary. Download in a variety of formats.
* They save as .pdf files that you can email to your Kindle. It sees the .pdf as a file of words, not pictures of words, so it can be resized and adjusted just as any other ebook. Download the book to your PC, and email that file to your Kendle, or email@example.com and load through the USB cable if you want to save the 10 cent conversion charge. (but they have not started charging yet anyway)
** For the encrypted ones in .mobi, a tool can be used to allow the kindle to see it. This tool does not make a copy of the book, merely adds a flag so that the Kendle can display it (it would be hard to call this a violation of copywrite or use conditions since both formats are amazon's). The tool and directions on how to use it are at: http://igorsk.blogspot.com/2007/12/mobipo
*** Site runs on donations
**** Can be downloaded directly to your Kindle when it is plugged in as an external storeage device, simply specify the Kindle folder when selecting where to put your book.