What spyware did he put on there? If it was installed via the market, it will just redownload itself if your handset is link to the same Google account (although Google are pretty good at recognising spyware and removing it from the market). You'd be better off just uninstalling the app.
Also, how did you get the book? Kindle or the Google book app? I'm not sure about the google app, but with the kindle, the books are synced to the cloud so if you delete the book, it will redownload once you link back to the same Amazon account. I would expect the Google reader has the same functionality. If it was just stored on the SD Card, generally the SD Card isn't deleted during a factory reset.
If you let me know what phone you have, I can move to that devices subforum.