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I have an eBookwise and an iPod Touch and I read a LOT on the iPod Touch. I like it because it is multifunction, so I can have my music, PDA type stuff, games and books all on one device. I don't have a car, so I already have enough to cart around with me every day since I don't have anywhere else to put it but in my backpack!
eReader is imho the best app for reading on the Touch. You can download many free books from websites like manybooks.net directly from the app. You can also buy new ones from Fictionwise or eReader.com and easily download them directly from the app. Fictionwise also has a personal content server were you can upload your own stuff and download it into your bookshelf.
I am very happy with my Touch and think it makes an excellent e-book reader. I do still use my eBookwise at home and at the gym because it is easier to read when I am walking or moving, but for general reading, nothing beats my Touch. I love it.
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