Turns out Amazon does care a thing or two about hardware design. The 7-inch Kindle Fire HD is a thin-and-light thing of beauty with a very nice back for gripping. The UI is markedly improved — although the carousel is still there, we're seeing none of that stuttering from before. (Helps to have a new, faster OMAP 4470 processor.) Aesthetically, though, there aren't any drastic changes with the OS — it's just smoother.

There is a bunch of new software on the device, though. X-Ray and Whispersync were two of the buzzwords of the day, and both have much-expanded value on the Fire HD. X-Ray for video lets you see who's in a particular scene of a movie, see what else they've been in, and add their other movies to your Watchlist on Amazon. Whispersync for audio lets you synchronize a book and an audiobook, so you can listen while you walk and then pick up right where you left off to read. Admittedly we've only spent a few minutes with the device, but everything we tried was fast, smooth, and even simple to use. Even the Kindle FreeTime feature, which gives you ultra-granular control over what your kids can do on the tablet, is pretty clever.

At $199, the Fire HD certainly seems like a worthy Nexus 7 competitor. It's unquestionably worth the $40 premium over the Fire, which was updated but not exactly overhauled. We'll have to wait a few weeks to test one out, but it looks like the high end of the 7-inch tablet market is filling fast.

David Pierce contributed to this report.