Just so everyone knows, when you update to iOS4, you will have to re-download your offline books. I'm going to be a while...
I just updated to ios4 and did not lose my offline books. Did you log out before upgrading?
No, I stayed logged in, so I don't know what happened to my books. Maybe someone can give some pointers than for updating iOS4 so others won't have to redownload all of their books.
I just did a regular update of the OS to iOS4 and my off-line books are OK.
I too had no problems with my 3gs or my Ithouch, the books are just fine.
I just checked and have had the same problem. Not sure if this is random.
For those whose books were kept, did you back up and then restore in iTunes?
I did not as there is a problem with my 3GS and backups take about ten hours. I just get everything off the thing that I know I'll need and then update without a backup. That may be why I lost my data. For the original poster did you backup first before upgrading?