Lindsey, would you actually attempt to read full-length novels on your iPod? I don't know if I could do that without straining my eyes too much. On the other hand, if you're commuting through the city or a passenger on a long drive, this might be a nice way of skimming some text or reading part of something you don't want to carry around with you.
There used to be a site called
iPodLibrary which made available e-books already converted in the iPod Notes format... unfortunately the site seems to have disappeared.