So i started reading again on a WP7 device (a HTC HD7 to be exact.... that 4.3' screen really make a difference compared to my older 3.6' phone). I ditched Freda (which was actually the first decent ebook reader for WP7) and went with Bookviser , which is hands down the best reader for WP7 right now.
What i really liked about Bookviser is the awesome Feedbooks integration. You can find quite a few high quality free books there (i read about 5 Sherlock Holmes books until now on my daily commute). Also having the option to tweak the reading environment really helps.
So yeah, try Bookviser if you're reading on WP7 device.