This is a great product for families. I don't want to spend anything approaching $1000 for a kid to have their own Mac. And I don't want to drop $300-400 on a piece of junk Netbook running an OS that is highly susceptible to malicious software and hand it over to the very people in the house that are in most need of protecting.
Enter the iPad. It does everything my kids really need to do with a computer: email, web, basic document creation (grade school and middle school grade English don't require a lot of bells and whistles), movies, music, games and whatever other apps someone invents that would be handy for them.
And it gets them off of my iMac.
My biggest gripes:
The 3:4 ratio on the screen. I thought Apple was past that years ago - what gives?
Lack of camera - either front or back, but especially front facing for iChat/Skype. I really thought that was a no brainer.