The Digital Library of India initiative has scanned and placed online, over 5,30,000 books on various subjects. They are available free of cost from the website of Digital Library of India and its mirror sites – http://126.96.36.199/, http://www.new1.dli.ernet.in/ and http://www.new.dli.gov.in/ where these books can be viewed as scanned images. Digital Library of India has recently launched a new site where books can be directly downloaded in PDF format.
More than 50,000 books touch upon Indology, Sanskrit literature and Hindu religious texts, including the Vedas and other scriptures. A lot of them are rare and not available elsewhere and come from University libraries like the TTD/RSVP Sanskrit university at Tirupati, Sringeri Math etc.
You can directly get neatly formatted Adobe PDF books using the software, DLI Downloader hosted at https://code.google.com/p/dli-downloader/.
3rd Dec 2017: It seems DLI has shut down its old website and transferred all books to https://archive.org/details/digitallibraryindia
All books are now available as PDF files. Those who prefer to have DJVU, TIFF, etc have that option too.