For me, a huge plus for the iPad will be replacing books and magazines. The desktop and laptop are OK for reading text and the iPhone isn't very good. Something that lets me switch between books, email and Internet would be very useful.
I've got access to a PDF scanner, so I'll probably "rip" a lot of saved magazines, copies, etc. and put them onto the tablet. That would clear out several bookshelves for me. Everything would be easier to find, too. If it ends up a good book reader (and it certainly seems designed for that) then I'll probably move a lot of my collection and library to it.
The point is to do to text what the iPod did to music. I can also see considerable use for replacing textbooks. Printing and distribution costs for magazine and newspapers are high - digital delivery could make them competetive again. There just hasn't been a good working model for digital delivery of text from a storefront. Amazon is OK, but I think this will change things.
Also, I think this is going to be more popular with older consumers. I'd wager that a lotmof people here don't really remember a time before the Internet. They probably have never made coffee and eggs, then spread out the Sunday paper on the living room floor for a morning of getting black smudges on your fingertips. I'm 37 and remember what life was like before everything was instantly available from a five pound computer in your lap.
There are a lot of other people who still like newspapers, magazines and books better than skimming over websites to find what's useful. My parents (they're 67) still take the Sunday paper to a local restaurant for breakfast and to pick through it for a few hours.
The iPad should be popular with this crowd. Actually, my mother found out what the Kindle was a couple months ago and really wanted one. I told her to hold off because Apple has something in the pipeline. She will probably get one for her birthday in March. By the way, she does not want a laptop. But a tablet where she can have her books, magazines and newspaper will be a big hit. If she can put all of her vacation and grandkid photos on it to show to others, it will be an even bigger hit.
Not all products are designed for a 22 year old gamer who must have the fastest chips at the lowest price and the most features. Put another 20 years on that kid and he probably won't give a rip about that stuff. There's a market for them, too.