iBooks is a free application for the iPhone, iPod touch and iPad. The free 15.3MB download (iTunes link) is available in the App Store. It requires iOS 3.2 or later.
The full list of what's new in iBooks 1.3, according to Apple, includes:
Help your children learn to read with the new read-aloud feature included in select children's books from the iBookstore.
The read-aloud feature uses a real narrator to read the book to you, and in some books, it will even highlight the words as you read along.
Enhanced books can now automatically play audio or video included with the book.
Makes iBooks more responsive when opening very long books.
Addresses an issue where some books may display the same page twice.