So one thing I really like about the iPad (apart from the speed & bigger screen than the iPhone) is the gap around the screen - which at first I thought looked odd. Let me explain...
I'm constantly amazed by how easy the iPhone is to use, especially by people who've never really used a computer. My daughters have been able to use my iPhone for drawing & browsing photos for a long time (and they are 3 and 1 year old right now) - without me ever really showing them how. They just picked it up, played with it and figured it all out. (I might have shown them the two finger tap on the drawing app to change the pen). When they are a bit older and can actually read, am sure they'll feel right at home browsing too.
The biggest problem my daughters have found (particularly with my youngest, she was 1 year old in November) is holding the iphone without accidentally pressing one or more fingers on the screen - causing confusion in the multi-touch detection.
You've gotta be quite careful with an iPhone not to touch the screen while using it (something adults master quite quickly). So for kids, the iPad is gonna be so much simpler to use with its nice wide thumb/finger area when holding the device.
Lots of cars have DVD screens on the back of the headrests so kids in the back can watch movies while travelling. I can see iPad's being the long term replacement very soon...
So if you're a geek and need a reason to buy an iPad; just say you're getting one for the kids! Thats gonna be my excuse and I'm sticking to it...