iBooks is currently my favorite eReader and one of the best eReaders for the iPod Touch because it was actually made by Apple. As I understand it, iBooks was originally released on the iPad, and Apple soon released it on the iPod Touch and iPhone as well.
The thing I love about iBooks is that it's very aesthetically pleasing. It has a lovely wooden-looking bookshelf with all of your books displayed and unlike some other eReaders (I'm looking at you, Kindle), you can view your books in list view or bookshelf view. Bookshelf is my favorite. I think the list view wasn't as well-integrated or something, it just doesn't go with the flow of the rest of the app.
Of course, as you can see, in the list view, you can sort your books by titles, authors, and categories, but in the book shelf view, you can press and hold and drag your books around wherever you want them. It comes in handy if you want to order a series by reading order, as I've done with the Hunger Games trilogy here. You might not see the list view button on the shelf view, but all you have to do is pull down and it'll show up along with the search bar.
Another handy feature is the in-app store. Apple has pretty much stopped most other ebook readers from using their stores in-app. I might just be slinging conspiracy theories here, but Apple most likely did this so that more people would be inclined to use iBooks, if only just for the novelty of being able to shop inside the app. Once you purchase a book, you're taken back to your library so you can watch it download <g>.
Once your ebook collection starts to grow, you can add 'Collections.' You can use this feature to sort your books by genre, or maybe you like having a 'Currently Reading' pile, a 'Nightstand' pile, and a 'To-Read' pile.
This is a fantastic way to keep your books organized, especially when you have a large library.
iBooks also expands on some of the features typical of ebook readers. Instead of a single highlight color, iBooks offers you five. I like this for highlighting say, quotes in one color, and bits of writing that I like in another. iBooks also recently added a red underline to their highlights with the addition of textbooks.
Unlike the Kindle app, iBooks also has quite a few fonts to chose from.
Adding content to iBooks is also a bit easier than it is with other apps. With Kindle or other ebook readers, you'd have to access your iPod's apps in iTunes, find the reader, then add your files. With iBooks, it's as simple as dragging and dropping the books or documents you want to add.
iBooks reads the epub format, one of the most widely available ebook formats around. You don't just have to buy your books from the iBooks store, just like you don't have to buy your music just from iTunes. There are many websites that offer ebooks for free or to buy, and as long as they're epub, iBooks will read them.
You can even download ebooks straight from Safari. I load all my books on Dropbox and transfer them onto my iPod that way
Is iBooks the best reader for iPod Touch? Probably not. There are other ebook apps out there that have more/better features, to be sure. I like iBooks for its appearance (because I'm a very visual person, lol I'm the kind of person who does judge books by their covers at times. If the book wasn't worth an awesome cover it wasn't worth reading? XD Does that say something about me?) I have stopped using ebook readers that weren't that good-looking, even though they did their job and well. Like Stanza, which I'll probably be reviewing next, but I digress.
Long story short, iBooks is a pretty, functional app. I like it because aside from being pretty, it has never crashed on me, I have never lost any of my library content, and yes, because I can shop for books using their in-app store. Because it's made by Apple (and who knows the iPod better than Apple?), it's probably the most stable ebook reader I've used on the iPod.
iBooks also works with iCloud, so your purchases are automatically stored on the Cloud if you use this feature.