I have Kindle and it serves it purpose and much more for me. To me the Kindle is meant for book reading, while the iPad is meant for gaming, playing with apps and reading. If you've ever watched an iPad commercial on TV, they rarely even mention reading (if they do mention reading at all).
Kindle is great for reading books. iPad is great for playing with apps, games, and reading books but if you get an iPad it most likely isn't for the books you can read on the iPad its what else you can do with your iPad.
Depending on what purpose you want the iPad or the kindle for. If you want to read books only and not play games etc then go with the Kindle. Otherwise iPad is a great choice. Although Samsung has a new tablet out as well called Galaxy S tablet which is supposed to be an iPad competitor.