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I use the book.app. Once installed, you need to install the winscp app to save your books into the proper directory. The correct directory to save in is riit/private/var/mobile/media/ebooks.

When you download books, be sure to download them in the ipod book app format. (you can also transfer them into HTML format to read them).

A good site to download free books is http://manybooks.net/
 
Don't have the URL in front of me, but search for some1guy for a source for books. I'm assuming you already have the app available, which is easily found with standard sources.
 
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