Fortunately for me I have never had this problem. If anyone reads this thread and is interested in getting a Kindle Fire, can I make a recommendation?
While the KF is a good e-reader it is NOT a quote unquote Android Tablet and one should not expect it to work as one, It does not have the Android Market on it and it is hard as hades to get it on it without it crashing every time you load it.
Instead look at the Vizio 8 inch tablet at Walmart, I picked one up for just under 200.00, and just a pinch less than the Kindle Fire. The Vizio has the Android Market on it, a front facing camera (no back though, understand that the KF has no cameras at all) the screen is one inch larger, it is GPS capable where the KF is not, and so much more than the KF is capable of because it was meant to be a e-reader not a tablet, so much of the normal tablet hardware was left out, again, cameras, GPS etc.
Don't mistake the Vizio for a full blown Android Tablet either, like the Motorola Xoom or a comparable tablet because it is not. And when you get it/if you get it, I recommend installing a launcher from the Market as these tablets do not have a normal home screen set up, basically the home screen on these tablets are what you would normally call the settings screen. I use the free "GO Launcher EX"
GO currently does not have a theme for tablets but it has been suggested to them and they may have one in the near future, Loading the GO Launcher on the tablet will make it look like a Cell phone with a 8 inch screen, but you will have your 5 home screens and all the normal niceties of a normal tablet again.
Seriously, I like my KF, but had I known about the Vizio tablet when I bought my KF I would have passed the KF and gone straight to WalMart. And know, you have to go to a brick and mortar store to get the Vizio at the 200.00 dollar price, WM.com does not have it.
But if you are going to spend two hundred dollars on a e-reader you are better off buying the Vizio and just download the Kindle and Nook apps from the market. You get a much more flexible piece of hardware for the same amount of money and a larger screen to read by.
Vanquished, it does sound like you got a bad KF, and I hope they send you a good working unit, but if all else fails, try for a refund and put the money on a Vizio tablet.
Note too, that the Nook app for Android is not in the Amazon App Store. You will have to download the APK from another sight to your PC, plug your KF in to your PC and copy it over to the KF, then you will have to go to the Amazon App Store and download a file manager to your KF, open it and find the Nook.apk.
You will first have to go in to the KFs settings and turn on the ability to install apps from third party places.
Then go back to the file manager and click on the Nook.apk, the KF will launch install and set it up.
The Icon will look fuzzy because it is meant to be displayed on a cell phone and is a small icon that is being blown up by the KF to fit in the app cabinet. BUT!! the Nook app runs perfectly on the KF and sadly the Barns&Noble Nook store has more e-books than Amazon, or at least it had all the books I was looking for, where Amazon had next to nothing I was looking for.