The app that is used the most on my IPad is Goodreader.
Goodreader is a PDF reader that can also read MS Office (.doc, .ppt, .xls), Iwork '08/'09, HTML, TXT, photos, audio, and video files. It sycs directly with Box.com, Dropbox, FTP, and GMail attachments. You can organize your documents within directories and subdirectories. You can also password protect directories or the entire app to keep your data safe. Annotating can also be done (highlighting, freehand drawing, text editing, arrows, underlining, strikeouts, ovals, and more) on top of the PDF. Text file creation also works great. It even zips, unzips, and email documents.
Most of the time I am about free apps, but this app is well worth the $5.00 price