What a great idea for a thread --- thanks for starting this one, Bill.
Apart from Gutenberg, my favorite is the free library at baen.com
. These are sci-fi books, and in some cases the first (or the first N) book(s) in a series to get you hooked, but in many cases not. It's a lot of free books, so folks that like sci-fi mind candy might appreciate this site. I've read enough of these that I made sure to buy some eBooks from them too, I just appreciated their approach so much that I wanted to do that.
On my Droid X I'm using the free Aldiko eBook reader, and via its "download books" button one can directly go out and find various free books. One site they lead you to is Feedbooks.com
There's a lot of stuff out there; I hope others have some favorite options to share.