Shelf is a new iPhone app that has one simple goal. It allows you to take notes on the books you are reading. I've found it to be helpful on physical and digital books alike. It's currently free (you can read why as well), but it would easily be worth a paid price. One of the neat things about Shelf is that it supports the Google Books lookup, so it pulls in cover art, title, etc for your books.

It can be downloaded for free on the App Store.