We ran a brief test run the other day and it did work pretty well. This was a simple copy/paste of the text from the word files into the ibook author program as well as a few tables and stills to create a .ibooks format. We then emailed the .ibooks file to a gmail account. When we opened the email using an ipad, it asked if we wanted to open the file using ibook. We said yes and it worked as advertised. All the features including text highlighting and notes were there and the file remained in ibook.
The first time we tried it, we dumped a couple of video files and tried to email...the file itself was too big for the email account. That's when we just dumped the video files and left the text and some stills and it worked fine. I'm sure the larger files with video will work fine using Dropbox and the dropbox app for the ipad. That is actually our plan once we get some time to sit down and put the real files together.
The only other minor issue is our lack of familiarity with Pages and Keynote. We primarily use Adobe and only have brief experience with Pages and Keynote. If someone if strong with the iWorks suite...using the iBooks Author program should be fairly simple since it is a very similar interface. We decided to do a Lynda subscription just to brush up on iWorks in hopes to get more out of iBooks. Will have to wait and see what happens. But so far it seems very promising.