None of the iPhone/touch reading apps are up to the level of reading apps that were/are available for PDAs running PalmOS and Windows Mobile. Perhaps part of this is because the iPhone OS is rather lackluster. But I agree, Amazon needs to improve its Kindle apps for the iPhone/iPad. Too bad they won't allow MobiPocket reader for the iPhone/iPad. It was good on several PDAs, but Amazon (who owns it) has prevented it from being used.
I personally believe Apple needs to open their iphone/iPad platforms to all developers and their apps or the US Justice Department needs to pay them a long and costly visit the way they did Microsoft.