I'm a fan of Project Gutenberg, and was pleased to discover that the Nook displays the mobile version of that site nicely. I was less pleased to discover that B&N has the software set so that you can't actually download files via the device. Instead, I had to download the epub files to my computer, and from there transfer them over the USB cable. I'm really hoping that they change this in a future software revision.
Also, Amazon will not sell you an epub file, they push only their proprietary format. I'm not altogether surprised by this, but I was hoping that I'd be able to source books from either B&N or Amazon. However, it appears that there are a few third-party retailers.