oooohhhh.....where to start...
User configurable formatting, ease of use (loading books), display of publisher formatting, annotation/dictionary/bookmark functionality, parental controls, library management...
I know those are broad areas and you are looking for specifics, but I really don't want to write a book...lol
Some of my biggest issues with ibooks is from an ebook creator perspective...there are so many quirks and workarounds that have to be followed to get the book to look the way you want...and if you do all that, then the book won't look right in other readers.
For those who just want to open a book and read probably the best way to see how much ibooks lacks in functionality, is to experience an app that does things right. Then when you go back to ibooks you will be constantly trying to do something and reminding yourself that ibooks just doesn't do it.
I would recommend looking at Marvin for iPad...it's free. The iPhone version will be released in a couple weeks. Just be warned...it'll ruin you on using any other reader app...
Cheers!