The Kindle Fire does not exactly run the latest version of Android. Upgrading the Android software on the device is not something Amazon makes super easy. That has not stopped Kindle Fire users from hacking their devices and installing more advanced editions of Android on them. Developer Hashcode has managed to install Android 4.1 Jelly Bean on the Kindle Fire.
The first build is not perfect though. For instance, hardware video acceleration is not fully supported. Enabling WiFi is tricky as well. But those are not things that can’t be fixed. The UI looks pretty much similar to what you get with the Google Nexus 7. You need to have your device rooted to get started with this process. Liliputing already has a complete guide that shows you how to hack your Kindle Fire.
Should you hack your Kindle Fire to run Android 4.1? That is not a bad idea if you do not afford to pay another $200 for the Nexus 7. But the new Google tablet is faster and a better device overall. You may want to wait for Amazon tablet to become cheaper before trying this.