The Kindle 2 allows you to highlight passages in the books you are reading, just like a "real" version of a book. The nice thing about highlighting in the Kindle is that you can see all of your highlighted passages in one place so you don't need to flip through the book to find them.

To highlight a passage in the Kindle use the 5-way controller to move the cursor to the start of the passage to be highlighted and then press the controller. Then move the 5-way to the end of the passage to be highlighted (you can turn pages if needed). When you get to the end, press the controller again.

To see all of your highlighted passages, press the Menu button and select My Notes & Marks.