There are a wealth of free eBooks on the internet, including some of the great classics of literature. The good news is, you can easily add these to your iPad's iBooks library by adding them via iTunes and syncing them to your library.
This is made possible by the fact that iBooks uses the popular open format ePub, as Apple recently revealed. Apple's iBooks informational page states
The iBooks app uses the ePub format — the most popular open book format in the world. That makes it easy for publishers to create iBooks versions of your favorite reads. And you can add free ePub titles to iTunes and sync them to the iBooks app on your iPad.