Recently I have finally found a way to read on my iPod Touch, using two free applications:
Calibre (for Mac OSX) and
Stanza (for iPhone). I guess they have been used by others for a while. This combo should work on platforms other than Mac OS X, and it doesn't require jailbreak to transfer e-books to my iPod Touch. I can now download some webpages, convert it to a better format for reading on iPod Touch, and read them in dark using my iPod Touch. Calibre also supports fetching webpages from some free news sources (or paid news sources, requiring proper authentication).
A good way to read on iPod Touch. Highly recommended!