Batalugu is a new (beta) site that is great for creating digital books. I like to think of this as a cross between BookRix and Tikatok, that is ideal for digital storytelling. This is a very user friendly site w/ lots of options to choose from such as: themes, page layout, etc etc. My only concern is if a user can actual order a hard copy of their book rather then just share them online w/ others.
I highly recommend checking out Batalugu for creating digital books by clicking here!!
Thanks to Larry Ferlazzo's blog for this great find.