I'm still on a 3rd gen iPad, but I think I'll give it away to family and move to the Retina Mini. Since getting my first iPad Mini I seldom, if ever, use the full size one. It's just too bulky and not comfortable enough in one hand.
But, the Air looks really nice though, I would definitely upgrade over a 3rd gen if I were even considering it — it's much faster, lighter, and more compact. The hefty edges will definitely make the older gens look, and feel much older than they actually are (not even two years yet). It's expensive yes, but if you use your iPad a lot I don't see why you wouldn't consider it. Portability is arguably the best feature of an iPad and the third/fourth generations are just excruciatingly heavy by comparison.