We got our nook from woot this past week, and one of the first things we did was to go to Project Gutenberg and download a few classics. But there are so many books available, not only on Gutenberg but from contemporary authors who are releasing some or all of their books free or for voluntary donations.
Recommend a free eBook! To avoid this becoming a meaningless sequence of titles, please give a brief description so that people reading can have some idea of whether they'd be interested and be sure to provide a link to where the book can be downloaded (or specify Kindle/NOOK store). Extra credit points awarded for books not appearing on any of Gutenberg's "Top 100" lists.
To start, I recommend The Invisible Man by H. G. Wells. I had a part-time job in the summer of 2007 as a parking lot attendant; I spent much of this time with a big thick volume of Wells' collected works. This novella is about a man who discovers a way to make himself invisible, without knowing how to reverse the effect. He ends up going kind of crazy and there are shenanigans. If you enjoy old-school science fiction (think Jules Verne, or Lovecraft without the mythos business), you might enjoy this one.

