I've been using my Kindle to read RSS feeds through Google Reader. Using the Kindle's built-in web browser, Google Reader works surprisingly well (as long as you enable keyboard shortcut commands). However, there are some annoyances:

• The text is pretty small due to the layout of the Reader web page. It's possible to zoom in, but then you need to scroll left and right to read each line of text (which is awkward). The text is certainly not as readable as regular books on the Kindle.
• Clicking on a link in Google Reader wants to open a new window, and the Kindle browser simply pops up a message box stating that multiple windows are not supported, with no option to continue.
• You must be connected to the Internet to use Google Reader, and can't browse it offline.

In order to address these issues, I've created a program that creates proper e-books in Mobipocket format using kindlegen. I had to solve several problems to make this work:

• I wanted to use the RSS feeds I've already configured in Google Reader. The Google Reader API is undocumented, so I had to rely on (out of date) descriptions of the API (eg. here and here).
• Downloading just the text of feeds wasn't quite enough, so I had to download all the images and then rewrite the <img> tags in the HTML to refer to the included image files.
• In order to tell the kindle each entry is a "chapter" and therefore allow navigation by skipping to the next entry, I had to create a table of contents in .ncx format.
• Originally kindlegen refused to recognise my HTML files as UTF-8 encoded, and built Mobipocket files with the wrong encoding. Eventually I figured out through trial and error that the HTML file names must end in .html (I was using no extension).

Currently this rss2mobi program downloads all the new entries from Google Reader and packs them up into a file that I can manually copy to my Kindle. Next to do is:

• Mark the downloaded entries as "read" in Google Reader so they aren't downloaded next time.
• Automatically transfer the file to the Kindle. Amazon provides a service where I can email the document to a special email address, and then it will be automatically sent to the Kindle wirelessly.

Once all this is in place, I can set up a daily task that gets the new content from Google Reader, and transfers it to my Kindle without any manual interaction.

You can find the code for rss2mobi on Github.