Audio books are available via Audible.com (an Amazon company). When you purchase a book on Kindle, you often get an option to purchase the audio book at a discount. You can also just purchase the audio version by itself directly from Audible.com. When you own the book on both Kindle and Audible, you are able to switch back and forth between reading and listening. Not long ago, Amazon was offering a free 30 day trial period with Audible that included two free books and discounts on other audio books. (I don't know if that is still available...)
Yes, if you use an audiobook app like the one from Audible.com. This is much more than just a vehicle to listen to audiobooks. If that is all you want, you should probably buy an ipod instead. There isn't a native audiobook player. This is just one of the millions of functions that this amazing piece of technology can handle. If you just want an mp3 player for audiobooks, you probably aren't the type of user that needs all the power and capabilities this tablet is meant for. This is a serious piece of hardware and not just an audiobook player.