My first reaction to the iPad was 'meh' just like everybody else, but I've warmed up to it. Give it one or two revisions and maybe a price drop (which you should do for all Apple products...actually all tech products in general) and I think there's a segment of the market that would really like something like this. Even I would consider buying one...if it had Flash. That really kills it for me. Yeah I wish all flash would just hurry up and be replaced by HTML 5 but that will take a while. In the meantime I want to play my flash games and watch my flash video.
As for the iTunes bookstore...maybe. The iPad and the Kindle are being described as direct competitors and for all practical purposes they are, but really they are both designed around the consumption of different types of print media. The Kindle is made for books and it has really perfected the experience of reading an electronic novel; you can take it anywhere, the battery last for fucking EVER, and contrary to LCD screens the E-Ink display actually looks better in direct sunlight and is really easy on the eyes. The Kindle has some problems, however, and they primarily have to do with periodicals. Newspapers, magazines, and blogs are simply not the type of thing you want to be reading on your Kindle. It lacks the high resolution color screen for displaying images, and it lacks the interface and refresh rate needed for efficient navigation. When you're browsing and scanning, and only spending a few seconds on each page, the Kindle becomes clunky and cumbersome. The iPad solves all of those problems and should be great for reading newspapers, magazines, and anything else you don't read long enough to develop eye strain.
But just as a reader I wouldn't buy an iPad quite yet...the Nook will be available any minute now which at least has some improved display and navigation features, and a new version of the Kindle is on the horizon. Plus sometime this month Amazon is opening up the Kindle Development Kit to foster the development of third party Kindle applications, which has me pretty excited. The device has a lot of untapped potential.
So...what was I saying? Yeah the iPad is not all that terrible if you develop the right mindset. Multitasking is not a big deal if you use it the way it was meant to be used (iWork is NOT the way it is meant to be used, sorry Apple) and if you have a huge iTunes library it will probably be great.