iSlate isn't totally horrible. Would have liked iPad better. It doesn't have the same ring as iPhone. Anyway what's in a name?
There is no way they would call it iPad because people would say it and think you are saying iPod. Too close, too much confusion.
iSlate sounds ok and it makes sense since there isn't really another option. MacBook Nano, it is not a book, it doesn't fold, MacPad sounds like a tampon lol. And the 'i' isn't worn out because it is a key distinguisher of Apple branding. People will automatically think Apple when they hear iSlate. It may be a little bit awkward, but after a while we won't think twice and will all be use to it.
iPod must have sounded a little odd when the product first came out too.
iSlate also makes sense because it sets it apart from the iPod, iPhone, and Macs as its own product line. I wouldn't be surprised if they really do call it this for the reasons I have stated.