USCF Rule 20B States:
"Use of recorded matter prohibited. During play, players are forbidden to make use of handwritten, printed, or otherwise recorded matter. While the penalty is at the discretion of the director, a forfeit loss is usually ruled if the material is relevant to the game while a lesser penalty or warning is common otherwise. For example, a player on move five of a King's Indian Defense would usually be forfeited for reading a book on the King's Indian but given a warning or time penalty for reading one on rook endings."
It also gives the TD tip noting that listening to music through headphones is not a violation, although the TD has the right to make sure that the recordings are unrelated to the game. After the latest edition of the rules were published, a few widely publicized cheating episodes have led some TDs to ban all electronics from the playing room.
I personally find reading at the chessboard rude to one's opponent. While I have often thought I'd like to be reading a novel during a game, I have restrained myself. Leaving the playing room and sitting in a nearby lounge reading the newspaper while waiting for an opponent to move, on the other hand, is common behavior. I'm certain that I've done that once or twice. I recall reading some law journals that the TD had with him in a few cases as well (over in a corner of the playing room where the TD was set up).
There is a guy who goes to a lot of tournaments. During his opponent's turn, he reads a book. It is not a chess book, but I still believe that this is cheating. I am sure that somewhere in the USCF rules it says it is illegal to refer to material printed before the game. My friend played him and called him for cheating, but the judge says it's not illegal. If you have the USCF book, look this up. Next time I played him, I'll get him one step closer to being banned from tournaments (he has a very bad reputation, but has never been proved cheating).