Once the book is finished, you will receive a boost to a certain skill or attribute.
From then on until you finish the book or switch books, you will slowly read the book while camping or staying in a town or village. Choosing that will allow you to pick one of the books in your inventory to read. From there, there is an option to 'select a book to read'. In order to read a book, go to the camp menu and choose 'take an action'.
Other books must be read, but the bonus is permanent. You do not have to read them, but losing the book will result in losing the bonus. Reference books provide the bonus by simply being in your inventory. You can purchase them from Book Merchants that are found in taverns. Their primary purpose is to give boosts to your skills or attributes without having to level up. Books can be very useful in the Mount&Blade series.
