There is a tool (unswindle) to remove DRM from kindle files, which uses the Kindle4PC application and darkreverser's mobidedrm. But, those two need to be in the same directory, and there is a handy download that does just that here (from darkreversers's blog at the bottom) The tools_v3.8 has a bunch of great tools for DRM-crippled content, including plugins for Calibre. However, it needs the 1.01 beta version of the K4PC program, and if you're using windows you'll need to install python at least 2.6 ( I used activestate python 2.7)
If the latest version of Kindle4PC is installed you'll need to uninstall it. Open it, unregister, and tell it to remove licensed content, then remove the "My Kindle content" directory. Then uninstall Kindle for PC. Then install the 1.01 beta version (from here for example, but there are versions all over the place).
Install the 1.01 beta version, launch it, and make sure to goto the settings and tell it not to update itself. Otherwise unswindle won't work - it will launch Kindle for PC which will promptly update itself to a version that unswindle can't work with. Then register it, and let it download your kindle books. Close it and relaunch it to make sure it won't try to update itself.
Once you're determined that K4PC won't update itself, you can goto the tools v3.8 and goto the kindlebooks_tools folder. If you're using windows goto the kindle_4_pc_windows folder, and double click the unswindle_v7 icon (if you've installed something like activestate python it should launch) which will then launch the Kindle for PC program. Once K4PC has launched, selected the book you'd like to unlock, then quit K4PC. Then unswindle will ask you to save the DRM-free file. Its in a .mobi format, and can now be opened with Calibre and converted if you wish. Just remember if you convert it to PDF, Calibre will format it as though it was a kindle, not a regular PDF. Then you can use something cool like xournal to annotate the PDF to you're heart's content.