Creating and viewing option is available. Upload file option is available(only image) But i want to upload (.txt.doc) file.
You can insert new chapters to each book and edit the chapters with editor - paste content from any doc, add images with image plugin of editor etc and save the chapter.
You can also Import selected HTML files or directories (containing HTML files) to chapters of books but you can't import directly txt files or doc files to book.
Here you see an example that is created with book module and tells about using book (teacher's manual):
http://moodle.tokem.fi/mod/book/view.php?id=51005&chapterid=9565