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There are other options: Some people have created individual books as stand-alone apps. You could look for other formats with good graphics and hyperlink support, iSilo comes to mind, but the potential audience would be VERY limited.
Stanza and eReader certainly seem to be the most used readers, and eReader seems to be a pain to work with, so if you want to reach a broad audience, getting the ePUB working would be the best bet. Not to mention, that would mean a working solution on lots of platforms, not just the iPhone/iTouch.
The Bandit
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