Love the iPad 2. Great value right now.
The current iPad is pretty much the king of tablets right now. It's $100 more, and you can get it with higher memory (32gb and 64gb). If you plan on keeping the tablet for 2-3 years then pay a bit more and get the 32gb model.
The rumor going around is that there will be a 7 1/2 or 8" iPad Mini announced next month.
If you are on a budget, it might be worth while holding out for that one. It will be harder to type on (smaller key board on-screen) but a bit more portable and cheaper than the full-sized iPads. (If the rumors are true!)