Is there any way to use an Ipod like a digital book reader, like the Sony Reader or the Amazon Kindle?
Yep.
The above method is probably the best but is a little time consuming and can’t display pictures. The other way which will work with pictures is to convert the pdf pages into jpg files that the ipod can display, but you will have resolution issues as the ipod can’t zoom and is also very time consuming.
Jerry Pournelle has said that if the iPhone could handle PDFs it’d be the perfect ebook reader.
Well, then it is the perfect ebook reader, since it handles PDFs just fine.
Can you download them and view them on an unhacked iPhone?
Yes. It’s not a hidden feature or anything - it’s been well-known functionality since before the launch.
Thanks for the info. I haven’t tried it yet with a pdf file but I tried it with a Microsoft Word document. It doesn’t seem to work. I then copied the text into a Textedit file and it worked, except that the file began with a bunch of coding stuff.