So this new Koobits reading app went live last week. I only just got a chance to play with it today and it's not bad. I don't like the color choice for the interface but the design is decent.
There's an integrated ebookstore, but you can also add your own ebooks. It didn't work so well with some of my PDFs but the Epubs came through okay. Unfortunately, I can't use any of the annotation with the Epub. Pagination and correct CSS support was lacking in the Epubs, too.
The native Koobits format is strictly paginated. It's basically a PDF, only without a reflow option. The base font size in most of the samples was too small to read comfortably. When I zoomed in to the point that I could read the ebook the page was bigger than my 14" laptop screen. For annotation it has highlighting and bookmarks.
Koobits also has an enhanced ebook format (and you can make ebooks for it, too). I'm not impressed with the demo ebook they included, but it does show some interesting possibilities for embedded audio and video.
Since it won't work as an Epub reader I'm going to give it a pass. But you might want to look at it yourself.