Hi all, wanted to offer my perspective.
As a student who is constantly reading, and also uses textbooks and technical manuals (I'm a CS major at a tough Engineering school), I have found the iPad to have a solution for every occasion. I, like many others, use both iBooks and Kindle applications.
In terms of pure functionality, I believe Amazon's Kindle app to be superior. The selection is obviously far more broad thanks to Kindle's head-start in the market and publisher support. This is more than apparent when attempting to purchase textbooks and programming books. These kinds of books aren't necessarily so mainstream, so it's no surprise that Apple hasn't stocked them in the iBookstore - however, Kindle's library is massive, and it hasn't failed me yet. The app itself also provides a clean, minimalistic UI that doesn't get in the way with quirks and needless-yet-fancy graphical effects like page turning. I really don't mind the simple approach Amazon has taken to their UI design with the Kindle app - it provides all of the functionality that iBooks does and more without getting in the way.
While iBooks is gorgeous, I just don't really see UI quirks being a deal-breaker, especially when Amazon can offer me more books (the books I need) at a better price. Generally, Kindle is my preferred app, and I find myself using it the most.
All of that said, I still find my uses with iBooks. Namely, I use it for PDF reading (sheet music, my resume, other PDF manuals and books) and ePub books that I have stored on my computer from way back when. In a situation where I already own the source material for what I'm reading, I prefer iBooks for its organization through "Collections" and slick UI. This interface is especially valuable when, in an interview, I can pull out my resume in iBooks and show it off with technical finesse. A feature like that is priceless.
I have heard of Stanza being a viable option, and people in this thread have mentioned the B&N app. At this point in time, I haven't found a reason to go near either of those, and I doubt that I will. Kindle and iBooks make a great combination, and I will probably continue to use both in tandem.