Right after iOS 4.0, Apple updated iBooks app to version 1.1 which now works for iPhone and iPod touch on top of iPad. This free app requires iOS 4.0 and includes a free Winnie The Pooh book. Main new feature in this release is the support of PDF files. PDF files opened in Mail will appear in iBooks library.
[iBooks iTunes link](http://itunes.apple.com/us/app/ibooks/id364709193?mt=8)