Here's how I came across this flaw in the iBooks app.
Browse the iBookstore in iBooks and bring up the Categories screen. Then go into an area with no WiFi or 3G connection (like riding a subway) or simply place your phone in Airplane Mode. Return to the iBooks app if you left it and you will not be able to return to your Library of books as the Library button that should be in the upper right-hand corner is not available. The application becomes non-responsive.
The only way to recover and be able to read books is to power cycle the iPhone or wait to get into an area with network connectivity.