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Fictionwise, Feedbooks, BooksOnBoard and Baen seem to be the most popular places to purchase books (other than Sony's ebook store).
Lot of free classics on mobileread. Look at the blue bar at the top of this website.
If you live in the U.S. check out the website of your local library. Many libraries have ebooks in pdf format you can download and read for free. The ebooks have an expiration of either 14 or 21 days and require a library card to access.
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