I firmly believe that the iPad is intended to replace a laptop in many situations as well as be a supplement to the iPod/iPhone platform.
Think about it: there is no comfortable position in which to use a laptop OTHER than having the laptop sit at a desk, and then it's just a small desktop machine. The portability of the laptop has been there -- but the usability has not.
You can't comfortably use a laptop on a couch (and anyone that claims to be able to would be under the age of 25 when your bones are still flexible and joints can be compressed for hours without soreness) in any position. If you sit with it on your lap, then you must keep your legs together to support the laptop and tilt your head downward. If you sit with it on the coffee table, then you're hunched over, extending yourself from the edge of the couch to the coffee table.
Even if you manage to find an acceptable position in which to use your laptop away from a desk-like surface, you're still stuck with a screen that is positioned both perpendicular to the keyboard and very close to the keyboard -- in other words, you have to basically look at your hands to use the machine. If you position the laptop ergonomically for your hands, then your head and neck suffer. If positioned ergonomically for head and neck, the hands and wrists suffer.
So, even though certain people can get past that, you're still stuck with a fragile piece of equipment that must be babied. The screen hinge is arguably the most fragile part of the laptop's structure, and, when in an open position, is extremely susceptible to being banged around and getting caught on stuff. The laptop, in other words, when open and in a "usable" state, is extremely unwieldy. It forms an odd shape that is neither portable nor easily moved.
There is no ideal way to actually use a laptop, other than in a desktop fashion.
The iPad solves this, and hence, I have dubbed it "The laptop for couch potatoes." It has no hinge and no fold-out or open-up parts, therefore it solves the unwieldy aspect of notebooks. While the "keyboard" is still situated close to the screen (well, it is the screen), you don't use it as you would a normal keyboard, and keyboard input as a whole has been reduced greatly with multi-touch gestures. It is lightweight and wouldn't strain the muscles of a 4-year-old when used for lengths of time. You still have to interact with your hands, but you're interacting in a much more natural way, and you can position the device relative to your hands, instead of positioning your hands to conform to the device.
This device also either supplements or can be used to completely replace a lot of multi-media products that have been shoehorned into vehicles in the last few years (portable DVD players/screens in the car to placate children, radios, CD players, etc.).
I sense a hit... not iPod-level nor even iPhone-level hit, but still a strong product (much stronger than the AppleTV).
I truly believe that Apple is going to have a decent hit with the lazy couch potatoes across the country and potentially the world. Oh, what I wouldn't have given when I was in college to be able to carry around something like this to watch a movie on between classes, or to just whip out and start word processing instead of pulling out a laptop, finding a table and waking it from sleep.