The new iPad is the class of all tablets. You would have to be completely out of touch with reality not to see that.
I love my iPhone 4s better than any other phone I've tried, but the line between the iPhone and W7 and Android phones is starting to blur in my opinion. The new iPhone needs some upgrades this iteration to keep it ahead of the pack, and that starts with a larger screen. It doesn't end there, but it does start there.
That said, I use my iPhone all day everyday and couldn't imagine being without it. My iPad is great and I use it when I can, but it's a want item, not a need.