imatt, I'm curious about this same exact thing since I plan to mainly use my ipad as an ebook reader. I'm not very excited about the DRM that Apple is implementing. I think if I purchase a book, I should be able to use it however I want - read it, lend it to a friend, etc.
I just checked ebooks.com to see what kind of ebook formats they support. It appears they give you the option to purchase PDF, ePub, Microsoft Reader, and MobiPocket format. It seems the majority of those formats are used on other e-reader software for handheld devices. I just have a feeling that the Apple e-reader software won't read these formats. I mean, they want you to buy books from itunes..not from other vendors using other formats, right?
The iPhone can read PDFs though, so I imagine you'll be able to read PDFs on the iPad. It'll probably just read like any other PDF (no fancy book/page layout and formatting with the turning pages).
I'm interested to see how this all pans out though. I'll definitely be looking for an app that is just as fancy as the built in reader app but allows you to read multiple formats. Thanks for sharing the link. ebooks.com seems like a really cool resource if we can find a way to read them on our ipads.