I don't know of any book which features them "prominently", but I also don't think you'd really need one. They are taught in various abstract algebra books, they're just taught in the fashion of, "Here's an exercise that introduces a peripheral topic it's useful to know about." For example, groups and rings of quaternions show up in MacLane & Birkhoff's Algebra (62, 426; 282) and Lang's Algebra (9, 545, 723, 758).
Edit: In an effort to find more applied information I put down my math books and picked up the information theoretic ones. You can find more information about the use of quaternions in the two volume Handbook of Digital Signal Processing and Salomon's Data Compression. More generally, when quaternions aren't explicitly referred to it's helpful to look up the coverage of complex rotations, especially with respect to the Discrete Fourier Transform.
Edit: In an effort to find more applied information I put down my math books and picked up the information theoretic ones. You can find more information about the use of quaternions in the two volume Handbook of Digital Signal Processing and Salomon's Data Compression. More generally, when quaternions aren't explicitly referred to it's helpful to look up the coverage of complex rotations, especially with respect to the Discrete Fourier Transform.
For a discussion of rotations with quaternions in the context of animation, this is a reasonably short paper: http://www.cs.cmu.edu/~kiranb/animation/p245-shoemake.pdf.