iAnnotate is probably the best App on the iPad, and certainly the best that I have paid for. If you ever need to read PDFs for anything other than pure interest (and even then, to be honest,) iAnnotate is the App for you.
It's great for organising your PDF library but it's the annotation tools that really make it. Notes are easy to add and the highlighter tool is great for flagging bits of interest - or pulling out quotes. You can even draw free-form, if you like. Once you're done, you can email the annotated PDF for printing etc. or just send the notes and, conveniently, the highlighted text. As an academic, this is the perfect tool for reviewing papers.
On top of all this, iAnnotate is probably the least buggy App that I have used. I'm not sure if it has ever crashed on me and it certainly hasn't lost anything I've done if it has. I initially baulked at the price but this App is worth every penny and I look forward to many happy years of iAnnotating my PDFs to come. Top stuff!