Previously, I have complained about no zoom-in function in the Kindle PDF reader. Well, actually, there is a firmware upgarde missing. My kindle is shipped with firmware 2.3. But the latest firmware is version 2.5. The latest version has the Zoom feature in the pdf reader. Moreover, after the zoom-in, you can pan across pdf as well. You can choose the zoom level from fit-to-screen,150%, 200% and 300%. I tried to read a 8.5"x11" pdf in 200% zoom level. That is very very readable!

Reference
Kindle Help: Kindle Software Upgarde