Another noteable, not only is it the only place I buy my books, it is also independantly owned. :)
Powells refuses to sell out to the man! wooo. They also have a smaller and less known outlet on Hawthorn St. as well I believe.

Powell's is one of the coolest bookstores in the world. A full city block of reading wonder located in Portland, OR, it also happens to be across the street from Ozone, a very cool record store. I could easily live in there if I had a sleeping bag and a pillow. :) Never go there if you are broke or don't want to spend any money. You will spend money, even if its just for a used copy of a book you read in high school. I owe my overinflated book collection to Powell's.

I only disagree with Zari about going into Powell's if you are broke. Sure, you can easily spend a good amount of that rent money (esp. since there's often a markup on books). But you can also not spend money there in several ways:
1) for the price of a coffee, hang around in the coffee spot and read all those books you don't really need, but have to read.
2) read those books in the aisles! great way to meet people, too!
3) Play the Powell's scavenger hunt: leave your phone number, or a favourite quote, in various books in each colour-coded room. Either wait for phone call, or just let it be. Or, look for what other people have left... try to find the links between books.
4) Make money by bringing those books filling too much room in your bathroom (or that evil housemate's collection) in for cash/trade.

Powell's has a great zine section, but the best place in Portland for zines is Reading Frenzy

In addition to its location on W Burnside at 10th, Powell's Books does indeed have a smaller store on SE Hawthorne Blvd (with an E... I live one block from it), as well as locations at PDX (The Portland Airport), Washington Square mall in Beaverton, a travel bookstore in Pioneer Courthouse Square (downtown at SW 6th and Yamhill), and a technical bookstore on the North Park Blocks at NW Park and Couch.

Another interesting note about Powells is that, while it has a reputation as being counter-culture and anti-corporate, they have been acting very poorly towards their employees. Recently they were on strike. Their main complaint was that the average wage at Powells, including the high payed computer geeks at Powells.com was on the order of $8 an hour. They voted to unionize and Powell (the man behind the store), for a long time, refused to recognize the union.
It was a very odd thing to cross a picket line to go to a book store. I promised the striking workers who accosted me in the street that I would browse a lot, and leave books in the wrong place, but not buy anthing. That seemed to make them smile.
They now have a contract so we can all shop at Powells again without feeling guilty.