Aside from some funkiness — hyphenation breaks and lack of italics — the text can be made bigger and it reflows. This is superior to reading in Safari, even with the evident problems.
As I understand it, moving eBooks from Stanza on the desktop to Stanza Reader on an iPhone/iPod Touch requires syncing via WiFi — cable syncing is not (yet?) supported — so if you don’t have a wireless router, get one first.
Right now, I’m reading a PDF I converted to MobiPocket to read on my LifeDrive. It’s horrendous looking, with headers and gaps and no italics and footnotes mashed into the text. This actually looks better than that. When the text is what matters, we’ll settle for rotten presentation — sometimes.