I was actually shown this in our local library when I took the girls for Story-time [ : D ] A great resource for people with Kindles/iPads/Ereaders or those who just like reading ebooks.
The site contains over 33,000 ebooks whose copyright has expired within the USA making them available for free download. Many are available in other languages than English.
The catalogue contains a large selection of 'classics' which would be of great benefit to those studying English Literature.
I am still trying to figure out a way to incorporate ebooks into a library setting. I think The Bookette was also looking into the applications of ebooks within the library.
Please remember if you are outside of the USA to check to verify that the copyright has expired prior to downloading the ebooks.
So go check out Project Gutenberg - Happy Reading.