iBooks doesn't yet support font embedding*. I don't quite get why Apple doesn’t want to give book designers the freedom to be able to create beautiful books, but that’s another topic entirely.
And though the choices are limited, and yes, frustrating, it’s still better than nothing at all: Times (serif), Helvetica (sans-serif), Courier (monospace),
Check it out. Here is 1-8
And here are 9 and 10. Palatino is used by default if you don't specify anything and your reader doesn't either.
Strange things happen when your readers choose other fonts. If they choose Cochin or Baskerville, everything gets bigger:
If they choose Verdana, the size of all the text (regardless of font), is reduced:
If they choose Times New Roman, all font information is lost, and the size goes back to normal.
Note that size and font choices are used for every book in the iBooks library and not just the one in which the settings were adjusted.
There are 10 sizes, the default is size 4.
*The iPad itself does allow font embedding, but only in Safari, and only as long as you use SVG fonts. But embedded fonts don’t work in iBooks. Aargh. (At least I haven't gotten them to work... if you have, please share!)