I had a Kindle 3 and ended up giving it to my sister and picked up a used iPad. For the books and articles I read that are academic PDFs with multiple columns and diagrams, it is no contest: the iPad is much much better. Reading them on the Kindle was not too nice since the Kindle's view is restricted to only 50% increments in zoom for PDF, resulting in either too much white space or too restricted a view that required very slow scrolling. In comparison, the iPad with GoodReader is just so much smoother and easier.
As for eyestrain, the Kindle's pearl e-ink display was excellent, but I do not mind the iPad's backlit display. Since I am used to reading so much on my computer, I do not find the iPad to be all that tiresome. For me, it's been more comfortable compared to reading at my desk on my monitor. I missed having the look of color when I was viewing diagrams and charts on the Kindle.
Though it wasn't good for my particular needs, the Kindle is an excellent e-reader for more typical books, especially for the native Kindle format. It is also a great value, and with Amazon's 30-day no restocking fee refund policy, anybody with interest in it should try it out.