.ibooks format on the iphone? I download a ".ibooks" file for this free book and tried adding it to my iPhone library but it doesn't show up. Manually dragging it over doesn't work either.

Is it because .ibooks isn't supported by iPhone?
It can't be done, because only the iPad can read the .ibooks format.  To let Apple know you want this expanded, tell them at

http://www.apple.com/feedback