At number 1, by far, is free Stanza ereader. This ereader support epub, the format of FictionWise, imports ebooks that you already have donwloaded and supports DRM. If you convert ebooks to Mobipocket format it will lose the formatting in the text such as oblique or bold text. Stanza has built an online catalog for ebooks in the public domain, such as Feed Books, Munseys.com and BookGlutton. RSS feeds are also supported by various newspapers and magazines. (Source: eReaders.nl)

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Second place is for eReader. This is the iPhone version of eReader for Palm, Symbian and Windows Mobile enabled devices. It is a nice application that takes the values of the iPhone, such as orientation and the way of turning pages. A nice extra is that you can look up words in the built in dictionary.
The catalog for ebooks uses ereader.com and Fictionwise.com. These books are not free, but you can use eReader to look up books in Many Books, these are in the public domain and therefore free. eReader is free to download

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Not free ($ 10, about 7.50 euros) is Bookshelf. For that $ 10 you get a few nice extras: customizable font and customizable background and font colors. Bookshelf makes use of the "Free Library" from Baen via an integrated online catalog and Webscriptions programs. Allows you to download ebooks directly to your iPhone, without converting them first on your PC. You can also share your Bookshelf with other users, rather than one book at a time, such as Stanza.
Moreover, there is a light version of Bookshelf, the BookshelfLT. With this one you can not customize the background and characters, but all other features are avaible. In BookshelfLT a non-removable advertising bar is shown and you can download a maximum of 10 books at a time.

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The last in the list is iSilo. The iSilo format has been used since the 90s and was adopted by the legal and medical world, to fill up a gap in conversion programs. It made ebooks from HTML with hyperlinks and could easily be put on PDAs.
iSilo ereader is not as good as the previous three, but doctors and lawyers can now easily convert their documents to the iPhone, without the fear of loosing information. However iSilo can read RTF and PDF documents.

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