I hve four e-book readers installed on my iPod Touch - BookZ, BookShelf, eReader and Stanza.
I find that I use BookShelf more than all the others combined for several reasons:
a) I can connect driectly to
www.baen.com and download books from the free library and books I've purchased directly to the device
b) I can set fonts and colors which I find easy to read on the rather small screen