Source: http://feeds.gawker.com/~r/lifehacker/full/~3/a6nK_Z0xnyU/stanza-turns-your-iphone-into-a-kindle
iPhone/iPod touch only: If recession budgeting meant choosing an iPhone/iPod touch over a Kindle when the dust cleared this holiday season, you're in luck: Stanza is a free and fantastic ebook reader for your iPhone.
The free application comes pre-loaded with several sources for downloading free or public domain books (including the entire Project Gutenberg library), so you can easily download books like The Art of War, The Complete Works of William Shakespeare, or Walden in just a few seconds without spending a dime.
However, if you want to get new books, Stanza also comes with a bookstore with which you can purchase popular new titles as well. Prices range from $8 to $15 based on the books I browsed. The reader itself is fully customizable, so if you don't like the standard black text on white background look, you can just as easily pick something that suits you. Stanza is a free download for the iPhone or iPod touch.
If you can't imagine reading from your iPhone or iPod touch in public, consider turning your iPhone into a Moleskine book so it still appears to onlookers like you're reading dead-tree style.