One of the things that we discovered, as more members of my family got kindles, is that it's easy to switch the account that your kindle is on. When you switch accounts you get access to all the books on that account. It also doesn't remove any of the books you already have on your kindle (just don't archive them).
Now, Is it sanctioned/legal? Nope. It's questionable at best, but the Amazon rep who basically explained the loophole to us said that there was no issue switching the account a kindle was on. The only issue is that there are download limits to books (another reason never to "archive" off your kindle), so it's not something that works on a massive scale, but for small groups that lend a lot, it's actually way nicer than paper books.