The latest version of iBooks (or possibly one of the previous versions -- we're not sure when this change went in) includes a helpful little update in it: iBooks now recognizes EPUB files, which means it can open those files directly from anywhere on your iPhone, from your email to a DropBox folder or whatever you've got. That includes Mobile Safari as well -- you can just tap a link to an eBook, and open it right up in iBooks.
Where, you might ask, can you find EPUB files? Lots of eBook retailers sell them directly, either in zipped copies or just as a file itself. Or, if you head over to the official format site, you can find a whole list of classic titles all ready to read in EPUB format. And Project Gutenberg also offers most of its titles in EPUB format, so you can grab them from there as well.