I just got an email from the peeps at Amazon, regarding my stolen Kindle for Android question and I thought I might share it with you, just in case your cellphone is stolen like mine (fingers crossed this never happens to you).
In regards to my question if the thieves could access my library on the phone, they said:
If you deregister the phone from your account, it is no longer associated with your account and no one can access your Kindle books.
and also, if you change the email associated with your amazon.com account:
deregister and register your other Kindle applications registered in your account to update them.