Your not locked into Google Play with the N7..well, after you load the Amazon/Kindle app that is. The difference is that with the Kindle to get outside the Amazon Ecosystem(which is no slouch I might add), you have to do this roto-rooter stuff and side load and such (something I would not want to do with any tablet at $200+). With the N7 it's just load app and go. For instance, I needed the SqueezeCommander app (not available through Amazon), with the Kindle, I'd have to find someone with an Android phone and sideload it or root the Kindle and load it that way, but would end up with a broken Kindle I think. (This rooting business just sounds sinister to me as I do not understand it, so therefore I'm scared of it). Not that the Kindle is bad, it's a very nice tablet, just not as flexable as the N7. With the N7 I just grab and go, no fuss, no muss, just did it last night. (I came very close to getting a Kindle before deciding on the N7).
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I was not expecting stellar sound or even great sound or very good sound, just decent and some volume. No tablet has stellar sound or great sound. I finally solved my volume issue and I get no distortion, but I don't use the tablet for music or movies and such. Tablets are just not designed for things like music and audio. It's adaquate for audio books I imagine (have not tried it), but little else. I will try headphones and see how they are, should be better than the speaker. I'm not too concerned after that since the tablet for me is a adaptor for my eyes and a productivity device and nothing more. For entertainment I already have an uber desktop PC and a surround system and even a vintage stereo system, so I'm set there.
Try the 'speaker boost' app from the app store. It warns you could blow your speakers out - now that's what I'm talking about!