I don’t know of any online libraries at all. However, there are plenty of cheap and free books available out there, the trouble is how much is accessible with a Kindle. Because the Kindle is Amazon’s proprietory devise, I don’t know whether you can access Feedbooks, BooksOnBoard, etc. It’s one advantage I’m enjoying with my iPhone, as I have Kindle, iBooks, Stanza and ereader, along with 3D Bookcase, which updates with free books every so often. There’s lots of free books available through the various apps, and cheap copies of recent books. I got a copy of a Rudy Rucker compilation for free via Stanza that’s £8.99 in Waterstones, and a book called The Windup Girl for £4.95 that’s £8.99, and all of the books by Cory Doctorow are released for free while the dead tree versions retail for normal prices in Waterstones et al. Not saying at all that you should look elsewhere, the Kindle is as good as any other eBook Reader, it’s just that source material can’t be always obtained from the widest variety of outlets, AFAIK.