Here’s a quick video that shows how the iPhone works as a digital publication reader. In this case, the publication is a magazine rather than a book and it uses the Texterity system which was originally ported to the iPhone in July 2007.
Texterity and Zinio (also due for release on the iPhone) are a couple of digital publishing platforms that are probably unfamiliar to much of the ebook world. But they’ve both been around for several years and are now quite well-supported and mature platforms. They’ve targeted magazine publishers primarily and as such include facsimile layouts of magazine pages and extensive functionality around advertising and subscription management, both of which have been of limited interest to traditional book publishers but are vital to magazine publishers’ business models.