Amazon.com Customer Service Post for 3/10/2009:
Playing MP3s on Kindle 2
If you've transferred music to your device and are unable to select the Play MP3 option from your Experimental list, there are a few things you'll want to check. The first thing you want to verify is that the files are in a standard .MP3 format, and are free of Digital Rights Management (DRM) software. Some online music vendors sell protected files in other formats like .MP4 or .AAC, and these aren't compatible. The files you transfer must also be placed in the device's "music" folder, and not in the main Kindle drive or one of the other content folders.