i have a kindle 2 and own an ipad 1 and an iphone 4. I have read on them all, initially had my kindle prior to the ipad, it was amazing bit of kit and i realised why my baggage is so often over the limit when i go away - loads of heavy books for me to go through usually! it worked brilliantly in the maldivian sun and had only 1 issue, that was it was slow to load the menu (i'll explain why in a minute).
So the ipad comes out and i HAVE to get the new shiny! i use ibooks and love it, also there's a kindle app brilliant! My kindle stays in a drawer gathering dust for a few months.
Commuting becomes an issue with me using the ipad, i get paranoid that people are looking at my shiny ready to pounce and steal it

my back catalog of .txt books aren't getting read, i need to convert em and put them through itunes, i'm not really keen on the bookshelf look on ibooks and i nearly give myself concussion one night reading with it in bed and falling asleep.
Ok time to try the kindle again - i frakking love this device, how come it's so much faster at loading the menus? Ohhh i've only put 25 books on it not the 300+ .txt books in my collection.
So in closing lol
Kindle is great for reading books, the kindle store is great, value isn't too bad now, it's much lighter than the ipad, you can put loads of books onto it (i limit mine to maximum of 50 at a given time just because i don't want it to struggle, if you want more it will still work - and lets be honest who will read 50 novels on a standard holiday anyway), the e-ink display is a pleasure to read, and it's killer feature - no matter what type of sun is shining down on you/the kindle you can still read it perfectly, no glare, no reflections, just pure reading fun.
The ipad, i love it for what it does i love watching videos, surfing the net, presenting slideshows (did this for the first time this week, loved the geekiness!) playing apps and reading the occasional book.
This is why i will probably own both for some time, i'm even thinking of waiting to see if the K3 drops in price and i'll buy it so if my K2 gets damaged i have my spare.
To the OP i would say look at the kindle, ask a friend who owns one - hopefully you do know someone they seem to be everywhere these days - and play with it for a few hours, get a feel for the page turn effect, look at the contrast try reading a book sample, as it is with all devices it's personal preference, my wife hates the ipad (dunno why!) and loves her kindle 3 and a friend of mine adores his ipad and refuses to see my side of things regarding the kindle.
Hope this helps