I have yet to figure out what I would do with an iPad.
For me, the iPad is the perfect reading device. I read RSS feeds, articles I've saved in Instapaper, online fiction, published ebooks, even manuscripts for betaing. I carry my iPad around in my purse so it's always with me, and I probably spend at least two hours a day reading on it.
It's also a great portable games machine, especially puzzle and adventure-type games. Great prices, too: most of my favourite iOS games cost less than $5.
Most of all, the iPad is handy. I pick it up first thing in the morning, when I'm still in bed, and check my email. I browse the web late at night. I look things up on Wikipedia when I'm sitting on the couch and curious. I find recipes and take it with me into the kitchen as I cook.
I'm certainly not saying they're for everyone. One of my good friends won an iPad but barely uses it; she says it's too heavy for one-handed reading and she doesn't play games. But me? I love my iPad. It's a beautifully-designed piece of technology with a limited skillset, but the way it performs those skills is wonderful.
Cheers.