The new version of the Stanza e-reader, for the iPhone and Touch, includes a dictionary.
How to use it? Hold down your finger on the screen and watch it show yellow, then go to a white-on-black arrangement.
You can then follow the easy on-screen instructions to select which words to define. Exit by tapping the X in the upper left of the screen.
Another new wrinkle: Progress indicator for whole book
By the way, if you tap the screen once from the regular reading mode, you can see an indicator showing how far along you are in your book.
That feature was already announced. I don’t know if the dictionary was. But, voila, whether or not its in final form or just experimental, you can access it now!
A few other goodies, as Twittered by Lexcycle: "Global book search, dimmer switch, progress bar, usage tips."
Related: New versions for Bookshelf, Stanza iPhone readers, by Chris Meadows.