The iPhone reader/bookmarklets are working for me, at least. It's not a fabulous experience compared to using my Kindle, though. I suppose I could keep a book loaded in case of emergency, but I usually just surf on my iPhone when I'm bored. It's great to have another option, though, I'm not complaining.
I expect to see the iPhone reader apps to start coming fast and furiously at the end of the month with the release of the 2.0 software (and the app store). Well, perhaps "fast and furiously" is an exaggeration, but a gal's gotta dream!