I am a voracious reader. When I am in "reading mode", I can consume 3 books a week. I'm not reading that much right now, which means I "only" read about a book a week or so.
When I first got my iPhone 4 (a little less than a year ago), I experimented with all the different ebook stores. Eventually, due mainly to availability, I settled on the Amazon Kindle store as the main place where I buy ebooks.
I've bought a handful of 99¢ books as experiments. I find reading on my iPhone convenient: the Retina-quality screen, auto-dimming when I'm reading at night, and having always-on access to my library.
More recently, I've shifted my paperback buying (used to be at the $7 - $10 level) to $3 - $6 ebooks. The paperback format is of zero value to me – it really is all about the content.
I link above to Neal Stephenson's newest book, Reamde. It's the first book I've bought at the "hardcover price" level of $16 (it's $19 for the physical hardcover from Amazon).
I don't care that I can get it for the same or lower price at a Chapters or other big box bookstore.
I've turned the corner on ebook buying: the advantages of the digital format now outweigh considerations of even lower priced physical books.