Some folks just aren't happy with the Kindle case, and I think I'm among them. A few folks have pointed out that the Kindle stays in the case due to a tab that grabs on to a divot in the back of the Kindle. Due to this design the Kindle may stay in place, or pop out if the angle is just wrong, or the battery cover may stay in place and the rest of the Kindle fall out (happened to me once). Some folks seem to like holding the cover like a book, and it seems to do that OK, but after a week or so I've found that I like to read without the cover, so it served as only a case for me. And not a good one, IMHO.
No company has stepped forward with a replacement case yet, and I guess I'm just itchy, so I went to see what I could find. Cases seem to come in just a few varieties (based on a sampling of on-line shops, Microcenter, Circuit City, Staples...):
- Small Gadget Size: cell phone, iPod, PDA, etc.
- Camera size: a wide range here from point-and-click to pro-sumer SLR sized
- Laptop size: 13"-17"
- Portable DVD player: bigger than a small gadget, smaller than a laptop, thicker than a camera
And that's about it. The small gadget sizes are well ranged, as there are tons of these devices these days. The Kindle, however, isn't one of them. The Kindle could fit into some camera bags, but they are designed to hold a lot more than a small slate, and are therefore very impractical. Laptop bags are a good design for the Kindle, especially sleeves, but no one makes a 7" laptop bag. Portable DVD players are about the right size except way too thick, they seem to be a good alternative for UMPC devices, but not the kindle. Finally I checked container store and found the Baggallini Pocket Bagg. It holds the Kindle with little room to spare, which is exactly the size I needed. However as you can see from the product page there are all sorts of internal bits, which I am concerned could scratch my Kindle's screen. Not wanting to immediately hack up a $35 bag, I decided to augment it without altering the bag or my Kindle, and I did that by asking my wife to make a snap-in screen protector. The bag came with a snap-out key fob, so I bought a sew on snap of the same size and a polyester felt remnant and my lovely wife stitched it together to make this:

Which snaps in to the Baggallini's inside:

I place the kindle inside the bag, upside down, with the screen facing the screen protector and then I can even charge the Kindle right inside the bag. Of course this means I remove it from the bag to read it, but that's the way I like it.
Here are a couple more photos of the bag with the Kindle and my NPS Parks Pass as reference:

Perhaps this will help you with your Kindle Case Conundrum, or just add fuel to the fire. (OK, not fire, but certainly a polite discussion...)