If you are looking for a straight up e-reader and nothing else, the Kindle 3 is by far the best. Excellent battery life, weight, size and virtually no screen glare.
However, the iPad can fulfill your basic e-reader needs, and ALSO offers HD video viewing, excellent web browsing, the full app-store list, music, and more.
I'd say, if you want an all in one device, go with the iPad.
If you want just an e-reader, go Kindle 3.