Mine replaced my MacBook about three months ago. This wasn't intially by choice.
A pencil got between my MacBook's screen and keyboard in my notebook bag, and it cracked the LCD screen. So, all I had left for a portable device was the iPad. I didn't want to spend anymore money on that particular MacBook since I had already dropped $$$ for a new battery, new hard drive and new power supply this year. And I didn't want to purchase a new MacBook because the 13" hasn't been updated in forever and is still a Core 2 Duo (same as the 4 year old MacBook that recently broke).
I primarily use the iPad for web surfing, music, audiobooks and podcasts and TV. In fact, I almost prefer watching TV on it since there are less distractions and I can enjoy a few of my favorite TV shows in peace. That was a surprise given its 4:3 screen ratio.
I'm not a big eBook fan though. However, I do like Instapaper for long articles on Web sites (although I wish the reader feature in Safari 5 would come to iOS instead).
There are things I hate doing on it. Composing e-mail and writing on forums like this are both pains. I'm actually faster and more accurate at typing on the iPhone virtual keyboard (why I don't know).
Filling out web forms (account name, password, etc) are also difficult for me since most Web sites aren't optimized and it's easy to click off the form box.
I personally find it bothersome for content creation (Pages, Numbers, Keynote, Omnigraffle, Photogene, etc). I would rather do that on my Mac and I don't always find the touch UI for those apps all that intuitive (iWork, I'm talking to you).
Has it replaced my MacBook? Yes. Would I rather have another MacBook and go back to using the iPad as home entertainment device? Yes, but I like the fact that if all else fails (and it has for the moment) I can use the iPad for the same purposes if I absolutely have to.
Another suggestion would be to get the 16GB Wi-fi or 3G model. I have the 64GB 3G model, and it's been a waste. I have no doubt home sharing (via Wi fi) will come to the iPad soon and you really don't need the extra GBs unless you're going away for awhile.