A Google search for "free ebooks" will result in an overwhelming number of results. Several webpages have lists of thousands of sites offering free ebooks (Here is one with a smaller, but decent list). It is too overwhelming. I think it would be more useful to make a list of ebook sites we use regularly. Please feel free to contribute your favourite sites or access to your personal collections.
To convert file formats, use Mobipocket Creator or Calibre. They should work for most common formats. Sometimes I've had to convert something in a stupid format, then I just Google for "(source format) to (desired format) converter", replacing the bracketed parts with the actual formats, ie LIT to PRC.
Inkmesh will keep you up to date on free ebooks for your specific reader.
Instapaper will convert any webpage into ereader format so you can read content later. I often save a blog entry and all comments as a Kindle file and then listen to it in the car.
AvaxHome. I often have to use textbooks that weigh as much as a small child, but can usually find an electronic version here. Depending on where you live, downloading from here may not be entirely legal.