I have been wrestling with their TOS for a day or two now, trying to make sure I create a site that's on the up-and-up. I came across this statement which implies the URL shortening services are a violation of their TOS. I'm new to Amazon marketing so I wondered if I'm just reading it incorrectly:
For example, you must include your Associates ID or "tag" (appearing as XXXXX-20, or such other format as we may designate) as a parameter in the URL of each link you place on your site to the Amazon Site. In addition, you must not use a link shortening service in a manner that makes it unclear that you are linking to an Amazon Site.