The HTML formatted docs from Baen books work great in books.app. Otherwise plain text docs also work well but you have to break a full novel into smaller chapters for the application to work well. I also like smaller screen devices-- just my preference. I don't mind clicking the screen every couple sentences.
If you turn down the screen brightness to a reasonable level you can get about 8 hours reading per charge. Movies and wifi are the big battery drain.
Hopefully the SDK will allow someone to produce a more efficient reader application. I wonder if eReader or Mobipocket will be allowed to produce software for the iPhone/touch. Apple might decide they are competition.
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