I am revising this post on how I got swype beta installed and working on KFHD, the original KF method is not working since amazon locked out the ability to swap keyboards. This requires your device to be rooted
1) Sign up for Swype Beta on their website and download their installer on your KFHD.
2) Install the Installer APK and Log in
3) Select your Beta version and download
4) Install swype
5) Go to data/apps and move swype apk to system/apps and make sure permissions are rw-r-r
6) Install NookColorTools_0.2.apk found here: http://forum.xda-developers.com/showthread.php?t=868366
Link courtesy of timurg
7) Open NookColorTools and you will be able to select your keyboard. IF you keep getting a Force Close message, just dismiss, go back to system/apps and reinstall swype and force close should stop
I was also able to get this method to work with SlideIT keyboard.