I've seen lots of books on Amazon priced at $0.01 or $0.02 before. Maybe a result of similar processes? (I always assumed they were some kind of scam, since why the hell would someone sell a book so cheap?)
Those sellers are counting on making money by shipping for less than the amount by which Amazon reimburses them. ($3.99 for a recent purchase of mine, while the postage was about $2.00.)
Right. Practically speaking, these people aren't actually selling books, they are just making money by doing the "handling" part of S&H.
They are. I sold a chunk of my library, a couple hundred books, on Amazon, and saw sellers who would update their prices to be a cent or two below mine any time they didn't have the lowest price. The other commenter is correct, that there's still profit to be made in shipping charges.