MoleskineBook
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Found Footage: Turn an iPod touch into a Moleskine book
Wired has posted a guide/video showing you how to turn your iPod touch into a Moleskine book. They go on to turn the iPod touch into an e-reader type device by jailbreaking it. They used an application called "free Books" which can be found in the installer.app once your iPod touch has been jailbroken. For the full guide, check out the Wired article.
