This is probably the app I use the most. It's an RSS reader with some of the best features out of all RSS readers on the app store. (And hell, I've tried dozens of RSS readers, with most of them crashing or not syncing correctly.) Coming from the Netnewswire iPhone app, this one demolishes it. It syncs nicely with your Google Reader account, and you can do lots with entries (twitter, email, etc.).
This is the second most-used app on my iPhone. I always feel like I have to be reading something, and this is the best tool out there to read ebooks. Unlike many PDF readers on the app store, this one works flawlessly with big PDFs. I can open a 60 MB PDF without a problem. It renders nicely, I can do a search, select text, add a bookmark, open PDFs chapters (if there are any), zoom in/out, and other great stuff. Aside from PDFs, it can open HTML documents and images (PNG, JPG, GIF). It also has some great file management features, like rename files, move, and delete all within the app. It saves all files on the iPhone, so you don't need an Internet connection.
How do you get your PDFs on the iPhone, you ask? There's three ways and you don't need additional software for it. The first is the slowest: you can enter a URL to a document on the web (PDF, JPG, GIF, etc.) and it will download it and save it on the iPhone. Second, and the fastest way to transfer: within the app, it can turn the iPhone into a file server via wifi, and you can connect to it from your OS, where you can drag and drop files easily. The last way is by connecting to a web gui, which appears when you have the app running as a server - there's easy-to-understand instructions on how to do this within the app.