Leaked pictures give us a better idea of how the next-gen Kindle Fire HD will look like. It seems it will have tapered edges, more modern design, and smaller bezels, which was to be expected, since that's what everyone is doing now. Unfortunately, it doesn't seem like it will have a screen larger than 7", which is starting to feel a little too small now, especially after all the latest phablets and considering OEM's are learning to make smaller devices with smaller bezels.
LG has also taught us recently that you can make even a 8.3" tablet that is less wide than an iPad Mini. So at this point there's little excuse for not making the screens bigger on these devices, so you can really feel you're using a tablet, and not just something slightly larger than the latest flagship phone.
The new 7" Kindle will come with a 1920x1200 resolution (just like the new Nexus 7), will have 2 GB of RAM, and it will come with a Snapdragon 800 processor. So far the Kindle processors haven't been the best, but this year it seems Amazon really wants its tablets to gain some credibility with people who love high-end specs. The 7" tablet will also come with 16GB, 32GB or 64GB of internal storage, optional cellular data, and its custom OS will be built on top of Android 4.2.2.
There will also be another 8.9" model, with identical specs, except for a 2,560x1,600 display (like the Nexus 10 or Galaxy Note 10.1 2014 Edition),which means it will have higher PPI (339), since the size of the screen is smaller. It's probably not going to make much of a difference compared to the larger tablets with the same resolution, though, and the contrast and accuracy of the colors should matter more when comparing the quality.
Ever since Google launched the Nexus 7, Amazon has been having a hard time selling its Kindle Fire tablet to the Android community, because there's not much there that would compel them to buy it. Nexus 7 comes with all the Google apps, the latest version of stock Android, and unlike the Kindle, it will actually get future versions of Android over the next 18+ months.
This new one does have a faster CPU and GPU, but other than that it has no advantage over it, and the new Nexus 7 is already very fast. So Amazon's tablet will continue to sell only to people who don't know much the difference between a Nexus and a Kindle, or even between these and an iPad Mini.