I just threw a few ebooks at the iTunes 9.1 update, which brings iBooks support (to get ready for the iPad). Things are not bad, but they're not great.
Like Apple previously said, they're going to support the ePub format. So that works fine, and you can dump in unDRM-ed ePub books into iTunes and it'll be recognised for syncing. Unfortunately you can't read ePub books in iTunes - at least not yet - so this is purely a library organiser.
PDF, LIT, MOBI (Amazon's format), RTF, PDB and TXT were all denied. Luckily enough, if you do have a book you acquired somehow in one of those formats, all you have to do is run Calibre and convert it into ePub. It's pretty painless. If you find out what other formats iTunes will take in, let me know.
Also, I haven't finished the third book yet so no spoilers please!