Subtext is a great free iPad app that provides a place for teachers and students to have digital book discussions.
These are some of the many things that you can do with Subtext: using Subtext you can read ebooks, annotate ebooks, create quizzes about ebooks, and write blog posts about the ebooks you read. You can create private and public book discussion groups and build bookshelves for your groups.
To add books to your Subtext bookshelves you can pull from Google Books (many free ebooks are available that way), buy ebooks from Subtext (volume pricing is available), or upload your own titles (Greg Kulowiec has posted directions here). To annotate a section of a book just highlight it then choose what you want to do with it. The text that you highlight can be annotated with your messages, you can assign a quiz question to that text, or label that section as a literary element like “personification” or “foreshadowing.”