I've been an avid eBook reader for well over eighteen months. I treated myself to the Sony Pocket eBook reader but, since Christmas, have moved onto the Amazon Kindle, which I prefer. Although I do buy eBooks, I also read a lot more classic and other out of copyright literature than I ever did in paper form. Partly it's because some of the larger novels are an inconvenience to carry about as 'real' books but also because the Internet has given us access to thousands of neglected works that have been out of print for many years.
Amazon do a nice line in free eBooks, some are public domain, others are offered by budding writers either as a promotion or as an inducement for you to buy their other works. Many out of copyright books are available on Amazon for a small charge. There are also publishers who offer the complete works of a particular author for a few pounds and these might seem like good deals. However, many of these files are poorly proofread and formatted. Indeed, a good number don't even offer a useable table of contents, so that it becomes difficult to locate the work you want within a volume containing thousands of pages. Fortunately most, if not all, of these books are available for free somewhere on the web.
So here's my list, with comments, on the best eBook sites dealing with public domain and other free electronic literature.
AddAll
This is my first port of call when searching for eBooks, free or otherwise. This meta search site will tell you in seconds if the book you're looking for is available, legitimately, for free online as well as any chargeable versions that may be on sale from a variety of eBook suppliers. For example, a search for the Henry James novel Daisy Miller brings up a number of free etexts from a variety of sources. However there's also an edition, published by Penguin, which will set you back £4.99. Presumably this version will contain a scholarly introduction and notes on the text. It's your choice if you think it's worth paying just under a fiver for the added content.
MobileRead
This is a great site which has some of the best formatted eBooks available on the web. Run by a group of enthusiasts, the eBook library contains thousands of well-designed volumes on a wide range of subjects. You don't even have to be a member to download material. Some of the ebooks are truly stunning (There's a great Epub illustrated Three Men in a Boat by Jerome K. Jerome) The site is updated daily and, as it's based around an Internet forum, it's very easy to search for a particular book. If you want to, you can join in and upload your own formatted eBooks (tutorials provided). Highly recommended.
Munseys
This site boasts that they have "Over 20,000 rare and hard to find title in 10 formats". I might disagree about how rare some of the titles are, but for shear diversity, this site is pretty hard to beat. The website is updated daily and has a good search engine. I especially like the 'pulp' category. It was where I first came across such great 1950's hard-boiled crime writers as David Goodis, Charles Willeford and Ed Lacy (I was mainly attracted by the lurid covers which are also posted at the site). Munseys also has a pretty good horror and ghost fiction section, as well as a lot of Science-fiction taken from such magazines as Thrilling Wonder Stories. Formatting is sound but does tend to fall on the generic side. Books seem, for the most part, to be typo and error free but I've yet to come across an illustrated volume.
Project Gutenberg
The original eBooks site, created in 1971 by Michael Hart, now offers over 33,000 public domain eBooks. The website has moved with the times and now produces eBooks in a variety of different formats. Many other websites create their own eBooks from texts supplied by PG. I've found books here that are not available anywhere else for free. The formatting is very basic but they are all readable and are checked for spelling and other errors by an army of volunteers. There is also a PG Australia and a PG Canada which offer books not available from the main PG website. Remember that you are not allowed to download books if you live in a country where they are still in copyright.
Manybooks
Offers Project Gutenberg etexts in over 20 formats. Slightly easier to search than PG, each entry is accompanied by basic bibliographical information. One of the nicest things about this site is that it offers the chance for readers to post reviews of books they have read. Updates on Manybooks have been suspended whilst the site migrates to a new server. The last new book was uploaded at the beginning of April 2011.
Baen Free Library
If you're looking for something more up to date and your tastes turn towards hard/military science-fiction and fantasy, you could do worse than downloading a few novels from the Baen Free Library. Baen books run a subscription eBook service and this free library is a way of enticing you to subscribe. Selection is limited but does include such names as Murray Leinster, David Drake and Fred Saberhagan. As a teenager, I would have probably loved these books but they don't do much for me now.