While technology analysts have been touting e-ink “ which mimics the glare-free quality of real ink on a page “ as the breakthrough that could push e-readers into the mainstream, Forbes is reporting that the most popular e-reader in the U.S. is not Amazon’s Kindle or the Sony Reader, but Apple’s multi-platform iPhone.

Stanza, a book reading application offered in Apple’s … iPhone App Store since July, has been downloaded more than 395,000 times and continues to be installed at an average rate of about 5,000 copies a day, according to Portland, Ore.-based Lexcycle, the three-person start-up that created the reading software.

By comparison, Citigroup estimates Amazon will sell around 380,000 Kindles in 2008.

In fairness, Stanza is a free application, whereas the Kindle costs several hundred dollars to purchase, so the comparison isn’t exactly apples to apples. Another key difference is that titles available to Stanza users are public domain ones only, so no one will be reading the latest bestsellers on their iPhone.

Still, the figures do show that the demand is there for portable e-readers.