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I have been waiting so long for this.

On the one hand I'm excited.

On the other hand there are some series like LoTR and Harry Potter that I went ahead and re-bought. So that's frustrating, although on the third hand I got some value so and don't see as a total waste of money.

Of course, Harry Potter is the kind of thing that will probably never qualify for this. How broadly publishers do embrace this will be interesting to see.

I wish this worked the other way around as well. I'd love to get a discounted price on the hardcover versions of my Kindle books.
It looks like this only applies to books that were purchased new through amazon. Used books purchased through amazon marketplace are not included: http://www.amazon.com/gp/feature.html/?docId=1001373341
That would be way too easy to game. I.e. set up an Amazon Marketplace account, "sell" yourself and/or accomplices lots of books for "reasonable" prices, with the money minus some vig including Amazon's charges going back to the "buyers", then they buy el-cheapo Kindle copies.
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For sure. Not saying it's a poor choice. As a frequent buyer of used books on amazon, I was interested in the details and thought I would share in case anyone else had the same question.
I take it that this will apply only for physical books purchased through Amazon. I love using my Kindle; my only problem is that I lived a good portion of my life reading books on paper.

When I got an iPod, I was able to transfer all my existing CDs onto it; this program is the closest thing to an equivalent process for books. I just wish there were a way that I could prove that I own a book and qualify for the discounted price, even if I did not buy the book through Amazon.

Presumably, one could download the eBook to every book they've purchased on Amazon, even if they no longer own the print version (e.g., resold or lost). I'm hoping O'Reilly, Manning, and Apress get on board with this, but I can see why they'd hesitate.
Don't know about the others, but O'reill's been offering this for a long time.
O'Reilly has been doing this for a while. They offer discounted ebooks (I think $5) for print books you've already purchased after you "register" them (via ISBN) at http://oreilly.com/register/
Pragprog.com has done this for years, possibly since they began.
Manning provides access to e-books in multiple formats when you purchase a paper book.
Anything stopping me from buying a book with matchbook, and then sell the physical copy but keep the digital one ?
Your time, the difference in the price of a used book and a new book. This is also useful for people with large print libraries that was purchased from amazon before the kindle was on their radar.
I hope this applies to technical books as well. I would love to have things like my old DSP textbook and others available with me wherever I go, but still have the hardcopy I'm used to at home.
Exactly. They mention nostalgia as a reason to buy physical books, but for anything you use as a reference they're still a lot more convenient.

But it'd also be nice to have a stack of them in my pocket all the time.

This can't come soon enough. I'm preparing for a potential cross country move early next yet. I was looking at the potential of getting rid of a multitude of books that I haven't read yet since the storage cost would probably exceed the repurchase cost whenever I did get around to wanting to read those books. This makes that choice even more palatable.
I have been waiting for something like this for a long time. The only problem is that it is only for Kindle books. I would like a PDF/ePUB for any paper copy book I buy even if its a 5 dollar surcharge that is much better than buying the same book 2 separate times on different media (paper and ebook).

Honestly I would like this to be the default option for all paper books I buy, even if the costs get factored in to the buying price. If I can take my CDs I purchased and encode them into MP3 and use them on my e-device of choice then why cant a similar model be used for paper media.