If you're household is already committed to the iTunes ecosystem, iPad 2 is the logical choice, especially if you have quite a few purchases.
I'm pretty committed to the Apple ecosystem w/ several Macs at home, work, iphone 3g/4 and iPad 2. However, since I love 'toys' I'm on the pre-order w/ the Kindle Fire. For the price of 2, you still couldn't afford an iPad. We have a Kindle 2 and love it. I've used it for the daily local paper, the kids use it for books and comics, the wife uses it, etc. It's great for travel and IMHO, the iPad 2 doesn't compare as strictly a reading device. That being said, it would be nice to have a few more features, like color, to step up the Kindle. I don't need another iPad but at $200, the Fire seems like a fairly decent option. It runs Android and will have a lot of Amazon content there, which works out well since we're Amazon Prime subscribers.