If its an app just make it a simple text box with a scroll bar
You could do that, but the functionality portion is going to turn out very raw.
I suggest you look into publishing through Amazon's Kindle service, which will get your book onto the "Kindle for iPhone" catalogue, as well as the actual Kindle devices. That way you won't be cluttering up the store with yet another single function app.
I'd like to write and publish some direct to digital e-books. Does anyone know what the process is? How do I go about publishing books via the iPhone's e-readers?
It really depends upon how good an experience you want your readers to have. You can spend an awful lot of time/effort/money creating the ultimate book reader, but it probably won't pay off (unless you get quite lucky).
It's not really possible to do an eBook without getting your hands dirty with code, unless you use an existing format (I believe Stanza uses an open format). Try contacting some of the existing publishers, and see if they'd be willing to take on your book.