People say "The iPad is just a big iPod." I don't see that as a negative, and in fact, that's exactly why I bought one.
First off, the iPad itself is smaller, and a bit heavier, than you think it is. It's difficult to get a sense of scale in photos and video, so check one out in person. If you're reading this on a 15-inch laptop, cover one side of your screen and the other half is the iPad's screen in portrait format. I'll get to the weight later.
For me, the larger size of the iPad and the absence of a bulk-adding keyboard makes it perfect for at least one thing: Reading in bed. The idiosyncrasies of my schedule dictate that the only time I really have to read is for about an hour right before passing out, and I prefer to do it in a horizontal position since I've spent most of the day vertical or hunched in a chair. I've tried reading with a laptop in bed but it's unworkable, and I got tired of cooking my organs with a battery I could fry eggs on. The iPad enables me to read Wikipedia, magazines, books, other websites, etc. all together so I can cross-reference.
The Ergonomics of the iPad as an in-bed reader
In sitcoms people always read in bed by sitting upright, placing their ass where the pillow normally goes and using the headboard as a backrest. It's personal preference but to me this is freakish, and if that's the way you read these next few paragraphs will be of no worth to you.
I read laying flat on my back with my head inclined by a pillow or two, holding books or magazines in front of me and angled with the top tipped towards me or occasionally held over my face. This you cannot do with the iPad, at least not for long. It's not a heavy device by any means, but getting any kind of leverage on even 1.5 pounds from that position requires two hands, and I find eventually the iPad sinks to rest on my chest. This means that the screen plane is not perfectly perpendicular to my line of sight, so I'm not getting the full brightness. It's not a problem for me, and overall I find the trade-off well worth it, but those of you with bad eyesight might find it an issue.
I didn't appreciate the black border until I tried reading in bed and holding it. I initially figured I'd prefer a full bleed screen (if that is even technically possible) and put up with my fingers obscuring the edges of the display, but I changed my tune after using it. The black border is a necessary evil, especially with two hands on the display.
While I was experimenting with a comfortable way to hold the iPad, I finally had my "holy shit" moment when I stopped thinking about my hands and started focusing on the content. Because I read the print version of The Economist nightly but now suddenly had the digital version in my hands, it came into sharp contrast. I'm holding this magic piece of glass with the same table of contents that I can scan as in the print edition, plus there are back issues and older articles in here. I flipped through articles at whim, blowing up pictures and charts, and realized I could now quickly e-mail articles to myself that I wanted to reference for, say, Core77 pieces the next day.
Interestingly enough, this experience suffers greatly if your internet connection is tied up. The next night I was downloading a torrent, and with the connection thus occupied, I found myself less inclined to "explore" articles on the iPad by clicking links I wasn't sure if I wanted to read or not. It's easy to flip to a page in a print edition, scan the first few lines and move on. It's not so fun when you're waiting for a progress bar to load. The end result is I was more selective in what I read, and I didn't like that as much--for me part of the joy of reading magazines are the things you discover accidentally.
The book reader apps
Until Barnes & Noble gets their act together, you've got iBooks and the Kindle app. The Kindle App for iPhone, when scaled up 2X for the iPad, is no good; the letters come in all pixelated. Do yourself a favor and download the Kindle's dedicated iPad app, which I actually had trouble finding on the ITMS (coincidence?).
My personal preference for interface is iBooks. In portrait mode it gives you two "pages" or columns rather than one, making for shorter lines and an easier read. The Kindle app just gives you one wide page.
I've heard the Kindle app criticized for not having the page-turning animation of iBooks, but I think that's silly. You get over the iBooks animation after one or two times, and it doesn't add anything to the reading experience.
The iPad in...the bathroom
This may seem scatological, but I have to talk about the iPad's bathroom functionality. A subset of the population, mostly guys I'm guessing, like to read in the bathroom and some will even labor over what book or magazine to bring in there. I had a comedian friend who used to do a bit about running around his house before going to the bathroom, doing the dance a child does when he's trying to hold it, while searching for compelling reading material. With the iPad this "problem" is obviously solved as you now have the entire internet, not to mention e-mail, with you on your little adventure.
In the name of experimentation I brought the iPad into the bathroom and laid it on a stool in front of the toilet. I just checked and sent my first e-mail from the crapper. I won't say who it was to because perhaps they'll feel it reflects poorly on our relationship.
As for typing anything more than a brief e-mail on this thing, forget about it, the onscreen keyboard is fugazi. I'm clumsy with the iPhone keyboard and the iPad's bigger buttons mean I made less errors, but I found touch-typing impossible, on or off the toilet. Tapping pixelated squares on glass is simply not a good way to enter data.
Some movies need to be altered for iPad viewing
I'm not keen on watching movies in bed, but I tried loading some video files up to see if it was an easy process. Unsurprisingly, programs and movies purchased in iTunes are a snap to synch; if you have movie files acquired by other means--say you downloaded a torrent, or ripped and converted one of your DVDs using Handbrake--it will not play on the iPad. At least, not without some tinkering.
Googling the problem revealed a string of confused consumers who couldn't figure out how to get these files to play on the iPad. Some reported Handbrake would work, others said it wouldn't, still others said the export settings had to be tuned just so.
In the end, I found the solution was Apple-easy. You just drag the desired movie file into iTunes, highlight it, and click "Advanced" on the top of the screen--there's an option for "Create iPad or Apple TV version." It does take a long time; I found a 50-minute file took about 25 minutes to convert. So while this is do-able, it's not an instant-gratification type of thing.
Viewing the movies themselves was pretty good (though I still prefer my 20-inch monitor). The picture quality is good and the sound is surprisingly loud and crisp. One thing that may take getting used to is that the iPad's speakers are so good that the whole thing vibrates depending on the tones being produced, providing a sort of force-feedback I don't welcome during what I want to be a passive experience.
Next I tried the Netflix app, which is pretty awesome. By default it's set to "Watch Instantly," so you hit the Netflix button, choose a program or movie and bam, it starts playing. The gap between deciding you want to watch something on Netflix and actually watching it is mere seconds, no lag, presuming you can find it quickly.
I realize this isn't that different from Netflix Watch Instantly on your laptop or desktop, but it somehow seems more amazing that it's being beamed instantaneously into this piece of glass you're holding with no wires or antennas. The younger generation raised on a steady diet of new technology may not find this amazing, yet for me it was another "holy shit" moment. Probably because I remember having to drive to a video store, look at pictures on boxes, wait at a cash register, and drive back home.
The iPad's undiscovered potential
I'm happy with the iPad as a mere e-reader, but that in itself is not why I shelled out $499 for one; there are two other reasons. The first is because computing is clearly moving towards a touch interface, and I'm curious to dip my foot into the pool. Because right now, to me, touch interface is still in its "gimmick" stage; beyond basic navigation--swiping, pinching, scrolling and so on--it hasn't become important enough to people who need to do more than play with a stack of photos. I'm curious to see how it develops, and if someone comes up with a better way to input data. (I just downloaded Dragon's Naturally Speaking voice-recognition app for the iPad, and if it's worth covering I'll post a review.)
The other reason I bought one is because I believe my usage of it will increase in ways I don't suspect yet. For example, the first iPhone commercials demonstrated features that I've never used my iPhone for--I've never pulled up the Maps app to find and call a sushi restaurant and trust me, I won't. But by combining a bunch of features that easily sync up with each other and my computer, Apple produced a device I could begin finding new ways to use, particular to my idiosyncrasies.
When I'm shopping for lumber or groceries--items that have a high level of pricing disparity where I live--I'll frequently photograph price tags, and down the road when enough of these images wind up in iPhoto, I compare prices and note which place has the cheapest what. Whenever I have to buy replacement plumbing and electrical parts from my local supply house, where the Chinese-speaking staff struggles with English, I'll photograph the part (sometimes off of a webpage on my laptop) and show it to them on the phone, and they get it right away. I've even used the Sketches app to draw parts I couldn't find a picture of. If I'm in Central Park, off the easily-navigable grid of Manhattan and my friends can't locate me, I'll take a photo of my surroundings and e-mail it to them; they can then see that the fountain is over here, the tall blue building is over there, and figure out which way they need to go.
I bought the iPhone so I wouldn't have to carry both a cell phone and an iPod, and having access to e-mail was just gravy. The other uses for it came as a surprise. I think as time goes on, I'll find similarly new utilities for the iPad.