I'd refrain from forcing embedded fonts onto the reader of an ebook. They are free to choose their fonts, line spacing, margins, etc to suit them. And because you do not control the screen size nor the resolution, choosing a font might make the ebook unreadable.

Don't.

My understanding is, with most eBook readers, the user defined font preference will take precedence over fonts embedded in the eBook. So the user still has the choice to use their prefered font if they do not like the embedded one. Is this not true?

I wouldn't make that assumption because I've seen eReaders which don't (devices and apps).

Building an eBook is like writing a website: you never know what system you're on and how good/bad a job the browser (or its version) does with interpreting your content's styling. If it supports the styling at all, that is. I'd keep it as simple as possible...

And personally, I find nothing more annoying than an ebook which overrides my settings because whoever implemented it wanted to be fancy :-)

Which eReaders don't allow users to choose their fonts?

Like most other web designers, I use specific font combinations on all the sites I design and then test on different devices and browsers to ensure performance. Yes, typography on electronic devices is a significant challenge but it our job as designers to take on this challenge. The Web would be very visually uninspiring if we all let browsers make typographic choices for us.

I never suggested I want to be fancy, unnecessarily. The most important thing, obviously, is the text is readable. So I am looking for suggestions on a body font that is readable and display fonts that are readable and have the right personality. And, of course, can be used in eBook readers, etc., etc.

What I meant to say was that on most ereaders (Kindle, Nook, Sony, various apps) the user chooses a font and other visuals for the book. Often times the ereader's software (or an ebook app) is rather oblivious of the font that an ebook "ships" with, and overrides it, and different ereaders provide varying CSS support.

Furthermore, forcing a font onto a user makes for a grumbling customer because they've already chosen the font that they're most comfortable with on their device. You never know how your font (and other visuals) will look on their display because you don't know the display size, resolution, render quality, etc. (I've even found that different fonts on different devices provide different sets of glyphs, so you may want to be careful with diacritics or ornaments or other fanciness.)

I'd suggest to design an ebook with font, margin, line-spacing, etc as user-defined variables.