I'm a little late to this discussion, but I'm happy with my Bebook (open source ebook reader) and see it as a huge help to my travels. I like to read classics and older fiction, which means I have a vast, free library to choose from--all of Project Gutenberg, for example. Many of these books aren't available from my local library and have long been out of print.

Another source for free ebooks in many formats is the MobileRead forum.

You can also buy books and put them on the Bebook, since it reads many formats, but I have so much to read already that I haven't done that yet.

I used to read books on my iPhone. However, that messes with my vision for half an hour afterward. Reading a device like the Bebook is much easier on my eyes.