I've tried several ebook readers on my android 1.6 & here's my take so far:
Moon+ reader: reads html & txt files, I haven't tried any txt file but the html files load really slowly... like 3 minutes to open a book. Once the book is open the interface is nice & easy to use. I notice that upgrades have been available every few days, so maybe some bugs are being worked out.
Kindle: Fine if you're buying books from Amazon or have a bunch on mobi files, but will only work with mobi files!
Aldiko: Seems very nice so far. I don't have many epub files, but there seem to be a lot of them available.
txtr: This is the only android free ebook reader software that says it can read pdf files. I happen to have a lot of pdf ebooks & so I gave it a try. Before you can open a pdf file with txtr, you have to log into an Adobe account through the txtr ap. So, I set up an Adobe account and tried it out, but I cannot log in through txtr, although I can log in to my Adobe account on my web browser! Maybe I'll get it working, but so far I'm disappointed with txtr.
Basically, Aldiko seems to be the best of the bunch. It looks like I'll be using Calibre to do a lot of file format conversions in the near future!