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I have a Nokia E65 with the Mobipocket software on it and it works great.
The screen is very readble, even with a relatively small font size, and there is a great range of free, DRM free and DRM'd books available in Mobipocket format.
OK, not technically a cheap solution (£300 if bought out of contract), but it only cost me £50 as an upgrade and the other features (camera, music player, movie player) are good too.
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