Most web sites that sell ebooks also have some kind of free section. B&N (
http://www.bn.com/) does (follow the "stories" link on their web site), Baen (
http://baen.com/) does (in their webscription section). There's also Project Guttenberg (
http://http://www.gutenberg.org/) is an extensive collection of public domain ebooks (thousands of them). There are many others.