I have both, and use both extensively for work.
iPad:
I carry my entire research library on my iPad and it´s my primary reading device for work. It´s much more comfortable as an e-reader than my Air, and it´s very easy to annotate and make notes on pdfs with a stylus. I´ve basically used my iPad to go paperless in my office, both with regard to reading all kinds of papers and for note taking.
I also use my iPad as my notebook, and IMO it is superior to my Air for this purposes due to the combination of stylus input and long battery life. When I´m in seminars, I can make easily make notes that combine hand writing, drawings and regular text input (I have an external keyboard for my iPad), and I never have to worry about running about of battery. I also never have to worry about wifi access, which is often an issue when I go to other institutions for seminars etc, with 3G access on my iPad. I sync all my notes to my Air so they are accessible from both devices.
For day to day portability, I prefer the iPad due to the combination of stylus input, 3G and long battery life. I never worry about internet access. I never worry about running out of battery. Stylus input is very practical for a lot of my work related tasks.
I also use my iPad for looking up things on the go on the internet, checking emails, etc - the usual stuff.
Air:
I use my Air for more ´heavy´content creation. I write my articles on my Air (as well as on the pc provided by my university), I use it to organise my research library, to sort, transcribe and analysemy video and audiodata, and to write presentations. The Air always comes with me if I´m travelling for more than two nights.
I also use it to organise my photos and music, but keep both synced to my iPad.
The idea that the iPad is just a toy is just pure nonsense IMO. It CAN be a toy only. But it can also be a device that hugely improves your work flow.
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Do people in this thread not have iPhones or another smartphone? If a smartphone, which is, to me, of higher priority than a tablet, can do the majority of the functions of a tablet, then the iPad is more of a luxury device to me. If you're on a feature phone, then yes, a tablet is an ideal device.
I do have a smart phone, but there is no way I´d use that to take notes in meetings or to read research articles. The screen is way too small for me.