The main attraction of the iPad is the form factor. You'll find many other devices that will do more (though you can do a lot with the iPhone OS) but you'll be hard pressed to find one that does more with the same form factor.
And something geeks don't tend to get, is that when it comes to mobile devices form factor is itself a very important feature.
I recommend iPads for people who read a lot of digital text and would prefer a more comfortable device for doing so. I don't like reading on a desktop PC or a laptop (I don't really use my laptops anymore) and this device has a form factor and battery life to put a laptop to shame for things like reading.
I'll eventually get one mainly for that, I don't read in bed right now but I would if I had a more comfortable digital reader than a laptop. I could get a dedicated reader like the Kindle but that does so much less than the iPad (there are a lot of great games for the iPad that I like) that for me it is a no-brainer. Right now this is the best device for me in that form factor.
There is a lot of hype around this (as usual for an Apple product) but ultimately it is just a very good tablet. I know folks who will replace their phone with it (you can run skype etc on it, but you can only receive calls when such programs are open) but I certainly don't recommend it as a phone. It is not a smartphone. It isn't great for content generation (word processing). It is great for content consumption.
So I'll mainly use it to surf the web, read books, play games, etc. I won't use it to write much, I can't really use it to program or get work done. It is not a swiss army knife, a netbook can do more. But that is the point that people who don't understand design and usability don't get.
Apple's lead industrial designer, Jonathan Ive
said: "In many ways, it's the things that are not there that we are most proud of. For us, it is all about refining and refining until it seems like there's nothing between the user and the content they are interacting with." And this is a concept that the average layman almost never gets but that is a fundamental part of design. As Antoine de St-Expurey put it, "A designer knows that he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away."
But it is human nature to just want more features (this is especially the case with gadget reviewers who tend to review based on total feature set) and left to our own devices much of our designs would be like the Homer car. Homer Simpson was asked to design a car and this is what he came up with:
And to a great extent, computing is like this. There is a reason your TV or your toaster are easier to operate than a computer. It is because they set out to do less than your computer does. There is a reason that people watch TV on a TV even though you could watch it on your computers if you have a TV tuner card.
This is the kind of device that aims to improve on some experiences (e.g. reading) over other computing devices through improvements in form factor and usability. The main problem it aims to solve is in the realm of ergonomics. Get one if that form factor appeals to you, because any of its features can be found on other devices. The appeal here is the form factor and usability.