Of lately I've heard lots of people expressing opinions about which is better - ipad or kindle. To me I don't see them in the same category or catering to the same use-cases.
The latest kindle at $139 is great for people who read a lot of paperback novels etc. It has great battery life, light, rugged and has space for practically all of your books (of that form factor). Kindle and it's kind of e-ink devices is also appealing to people who say reading on LED screen is a pain. To me, the fact that it doesn't have color and it's built-in pdf etc readers aren't very flexible w.r.t page layout rendering is a pain point. Also, search and flipping of pages fast is a key requirement for me. Organizing, browsing, bookmarking of books also matter. These functionalities are not very well done (compared to ipad).
iPad, apart from being a good book reading device, it has lots of other features that makes it worth the money for someone who doesn't already own a small laptop. iPad is a tad more convenient than a 13" macbook for a few usecases. But it's more of a luxury than a necessity to own both the devices.
Also, those who complain about reading on back-lit screens won't like to read for long hours on iPad.
But the fact that it can do much more than just read books - like do e-mails, do pdf and other documents better, browse Internet, play games and movies makes it a much more compelling device for many.
For someone like me who doesn't mind reading on a back-lit device and really wants all the rich functionalities and is pretty much always connected (hence doesn't really care about month long battery life etc) iPad is a clear winner.
Right now iPad is a first-generation device with lots of kinks to be worked out. I'm waiting for the next iteration in which apart from working out all the kinks discovered in this iteration, I expect it to get front and back facing camera (like iPhone 4) and better resolution screen. Wishing for it come out soon.