Stanza is a free application that lets you read electronic books on your iPhone. It's an excellent value, albeit with a no-frills approach that stops short of handling DRM-protected content and docs with heavy formatting or images.
Stanza provides a comfortable, customizable reading experience. You can quickly change text size via a slider in the settings, or using pinch and reverse pinch, adjust line and margin spacing, and choose from many different fonts. You can even pick your own text and background colors, in case you want old-school, CRT-style green on black. You can flip through chapters, rotate portrait or landscape, and search through text. Stanza also lets you leave multiple bookmarks and always remembers where you last left off.
It handles a wide variety of non-DRM formats (including Amazon Kindle, Mobipocket, Microsoft LIT, PalmDoc, and more), but PDFs and HTML don't always work quite like you'd expect since Stanza strips out images and formatting. Overall, this is an easy-to-use and useful app for anyone with a DRM-free e-book collection.