The damaged book is a book held in the pocket slot that can be obtained for 5,000 coins from Jossik after completing Horror From The Deep and The Dig Site. The four Ancient pages can be added to upgrade it to the Ancient Book, which gives a damage bonus. Dropping or destroying a damaged book and talking to Jossik results in him returning the book.
Players can check which pages are currently in your incomplete book with the "Check" option. Filling the book with all pages currently costs 326,247 coins. Once a page has been placed in a book, it cannot be removed.