Check out the linked linked walkthru to The Apple Blog's walkthru of Apple iBookstore and the iBook application. This is a pretty detailed walkthru and basic review of the application, store and experience on the iPad. Later this summer the iBook application will also be released for the iPhone and one would think the Mac can't be far behind.
I've actually had a chance to test drive the iPad and the iBookstore. I was very impressed. While I've not used a Kindle or a Nook, the experience of reading on the iPad (for a few short moments anyway) was very enjoyable. As stated in this article eBooks have some definite advantage over printed books, two of the coolest are searching and bookmarking. Both work very well on the iPad. You can read the book in either portrait or landscape mode, each giving you a difference experience.
Don't take my word for it, read the article. Better yet, hand down to your local Apple Store or BestBuy and take one for a test drive yourself. As an e-reader, I think the experience is exceptional. Don't forget, the iPad does far more too. So if you are thinking of getting either the Sony E-Reader, the Amazon Kindle or the Barnes & Noble Nook - do yourself a favor and check out Apple's iPad.