I've got a 3rd generation iPod Touch and have read several books on it. I have Stanza and the Bluefire app as well as those for the nook, Kobo, and Kindle. I've used them all and am pleased with all of them, though Bluefire is fast becoming a favorite.
I've also got a nook and enjoy reading on that, too. The iPod is nice because of its pocketable size; I can keep it with me at work so I can read on breaks.
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