Daily Lit (via JD Roth) is a fantastic idea for a service. You pick a book and they e-mail you a portion of it each day (at the time of your choosing). It’s free too. They have some classics that I’ve wanted to read and this is a great way to do it.
The only thing lacking is their selection of books (around 100), but I imagine that will grow. Other sources of free online books include Google Books and Project Gutenberg.