I have an iPad 2 and Kindle and love them both for different reasons.

iPad 2 has tons of functionality for me, helps that I have an iPhone 4 and several Macs at home. I'm pretty tied to the ecosystem. But one of the biggest reasons was to read comics. I tried on my iPhone 4 and while it works, the screen causes me to read panel by panel which isn't the greatest sometimes. The iPad allows me to read page by page. I'm using some apps that let me transfer a bunch of CBZ and CBR files and it works great.

I thought the ipad would kill my Kindle usage but it doesn't. For straight book reading, the Kindle (v2 in my case) is a much better experience. Lighter, easier on the eyes and better in daylight. I've found that the newspapers are easier to read on the Kindle as well.