I'd say, besides being a handheld computer, a proper eBook reader implementation might be a very good selling point. Proper books in de iTunes store, to compete with the kindle for example. Newspaper and magazine subscriptions and downloadable content over 3G and WiFi.
You're not going to read eBooks on your iPhone / iPod as the screen is too small. You're not going to read eBooks on your laptop as it doesn't read well either. An intermediate device could fit a eBook reader very well, good enough screen estate. And looking at Apple's usability history it probably can compete very well against existing eBook readers. It will have the potential to do to the eReader market (which is not really big yet) what the iPhone did to the telephony market.
And besides eBooks, you'll get much more functionality (movies, internet, games, etc) as it's basically a small computer.
Only problem is what kind of screen it will be using. LED, OLED or ePaper? (battery wise)
ps. obviously a multi-touch (branch of the) iPhone OS as Apple's really into the gesture and multi touch flow right now... perhaps they'll incorporate biometrics as well? Perhaps a pico projector? (might be a killer feature

)
pps. what about those free newspapers (worldwide: Metro, in the Netherlands: Spits, de Pers) being pushed daily to your tablet reader. It's cheaper and easier for both those free newspapers, and their readers.