They are nicely formatted and relatively easy to read. My complaints could easily be fixed by modifying the CSS myself (light text on dark background, larger text, different font, etc.). I like the functionality you get out of javascript with the chapters and the like.
That said, I do like the native Books app better (phone must be jailbroken to use), as it offers several of these features and I've grown accustom to them. It also remembers your place through exits, reboots of the phone, and even when switching back and forth between multiple books, none of which which safari will do for you (I guess it can remember your place through exits, but that isn't very reliable).
I think with the SDK coming out soon we'll see a lot better support for ebooks on the iPhone; I certainly hope so anyway. It's a lot of fun to read on it, but it takes a lot of time for me to format the ebooks I buy into something I can use and enjoy on the phone.
If you're interested in seeing how I've formatted books for reading with the Books application let me know.
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