I've handled a few and set up a few.

I personally have an Ipod touch which is essentially small version of the WIFI Ipad. The Iphone is the small version of the 3g Ipad.

They are not a replacement for a laptop.
They are great for travel or sitting next to the couch so you can IMDB something while you're watching TV or in fact if you're not near a TV but you have a good connection, you can use it as your personal TV.

Basically it's 99% for consuming the internet and 1% producing.(like writing emails). It has a great form factor that makes it even better than a netbook for travel.

It's not great for "working" on anything.

It's also very good at conserving energy and generally just working all the time.

If it fits your needs, get one, you'll enjoy the hell out of it. If you've got a full featured PC everywhere you go, you'll not use it much. If you want to get addicted, download Angry Birds.