Yeah, I received the same email regarding my kindle. That will be interesting to see how it pans out. .30 to 1.32 a book times how many books I bought for my kindle last year could end up being quite a bit of "free" books, which would be nice.
Amazon didn't mention anything about pulling anything off your e-reader(can they even do that?) like B&N apparently some people are saying here. If they did well... I back things up anyways.
Really, I'm hoping this sets precedent for e-books being cheaper. It's silly at best that most of the new e-books are still at nearly at full novel price when it costs them next to nothing to distribute a freaking file.