I mentioned this on my Twitter yesterday, but I thought I should use more than 140 characters to elaborate slightly. In the last week, most of the folks I've talked to about iPad don't quite understand it - but that's because they already travel with a phone and a laptop. I've had a Kindle for a couple of months, so I get it a little better.
iPad isn't for the people who need to take a laptop and phone everywhere. It's for people who either don't have a laptop now and want something to perform core functions (email, web, media) on the road, want a living room computer, or want to increase mobility without having to carry a massive bag of gear. I go almost everywhere with my iPhone, my MacBook, and a bag full of cables, chargers, and so on. But I need to log in to a corporate network of a client from a random location. I need to run Apple Remote Desktop. I need to generate quotes and log my hours. I even need to do some of that on vacations, too, because IT support is one of those jobs that never quite ends.
In other words, for me the iPad is just a cool gadget. It's not necessarily an essential part of my life. But now, take the person who works in an office. She (because the person I am using as a mental example is a she in real life) has an iMac that she uses to manage the business finances and database. She does email, runs FileMaker and QuickBooks, and writes letters to their funders and clients. When she goes home, she uses a MacBook Pro to log in and work remotely.
But she doesn't have to travel for work. If she's out of the house she's not working. She likes to get away and go sit in coffeehouses to do her personal things because she likes the environment there. She listens to a lot of music. Takes a lot of pictures. Likes to randomly surf the web. And the only thing she does for work outside the office and house is occasionally read and reply to a mail message.
That, folks, is a Grade A Prime iPad user, right there. In fact, it was practically made with her in mind. And there are millions of users like that. Apple's going to have no trouble selling these things.
One other thing to think about in the design. Until iPad, tablet computers were mainly regular computers, shoehorned into the tablet design, and running desktop operating systems. iPad turns that on its side. With iPad, it's not a shrunken desktop. Think of it like this: iPad is the full-size version. The iPhone is the scaled-down model. iPhones are basically just iPad Nanos, with a phone added in. They just happen to have come to market three years prior.