I have 3rd generation iPod can not download iBooks I want to read books

What happens when you try ? If you have the third gen iPod Touch then you should be able to update it to iOS 5.1.1 (so the iBooks app should install on it), if it's a second gen then 4.2.1 is the highest version that it supports.

If it is a third gen and it's not on iOS 5.1.1 and you want to update to it, then connect it to your computer's iTunes and copy any purchases off it to your computer via File > Devices > Transfer Purchases. You may also want to copy documents off it as well e.g. via the file sharingsection at the bottom of the device's apps tab when connected to iTunes, via wifi, email, dropbox etc - they should be included in the backup, but it's best to havea copy of them outside of the backup just in case. You can then force a backup of the iPad by right-clicking the iPod 'Device' on the left-hand sidebar of iTunes and selecting 'Backup' (on iTunes 11 you can enable the left-hand sidebar via option-command-S on a Mac, control-S on a PC)

Then start the update by selecting the iPod on the left-hand sidebar, and on the Summary tab on the right-hand side clicking the Check For Updates button

Updating to iOS 5+ : http://support.apple.com/kb/HT4972

Most ebooks are tied to the store's own apps/ereaders, so most ibooks from Apple can only be read in the iBooks app. Amazon's Kindle app also requires iOS 5+, though you might be able to use their cloud reader 'app' in Safari to read your kindle books : http://read.amazon.com