I love my iPad. Not simply as a fun and geeky toy, although there is that. Honestly though, it’s not something I would have bought it I weren’t returning to school. What makes the iPad a nearly indispensable tool for me in only the past two weeks, is not the lightness, even when combined with Apple’s bluetooth keyboard, and it’s not the apps like Attendance that I’m using for the classes I teach, or even the awesomeness that is Netflix Watch Instantly which I’ll occasionally curl up in bed with for an episode or two of television after I’ve spent the bulk of the day reading for my classes.
It’s how I do that reading that’s the main thing, and I am doing a whole heckuva lot of it on the iPad. Unless I’m reading an actual book, all the various articles and sections of books that are either already available as PDFs from my Professors or those that I make copies of from books put on reserve at the library are being read on my iPad. Everything goes into folders on my Dropbox account and then I access them through iAnnotate. Reading PDFs suddenly feels almost as natural as reading a book or copied pages and with iAnnotate I can mark up my texts exactly how I might with a pencil. Sure, writing marginalia and notes to myself is not quite as natural, and takes a bit more time since I have to type notes in, but aside from that, I really don’t notice much of a difference. And the benefits of carrying only the iPad instead of hundreds of pages of articles to and from school is absolutely fantastic. Even when I have to make copies at the library (because they aren’t advanced enough for me to simply scan directly to my school email), I can then scan them in at home and recycle the paper nearly immediately.
Additionally, I have already bought one of my books for class, Ben Jonson’s play The Alchemist directly through the Kindle store. While markup on Kindle books is not quite as wide-ranging as what I can do with iAnnotate, there are highlighting and notes and bookmarking abilities so that you can get some of the work done. I’m not sure I’d go to a Kindle version of a complex, theoretical text over an actual book, because of the limitations of the software, but as I get more and more used to using the iPad, I might be tempted to at least try and readjust my reading marginalia and markups to accommodate for the shift over to digital books.
If the iPad did nothing beyond simply being the best PDF reader and markup tool that exists, it would be worth it. But there is so much more to the device that I haven’t even begun to really tap into at this point. Plus, did I mention Netflix Watch Instantly? 
I choose the lowest model, 16 GB and wifi only for several reasons. The first is that I’m not going to be loading it up with music, my iPhone is still going to be how I listen to music while commuting on a daily basis and my iPod what I will be taking on longer trips (considering I have nearly 140 GB of music compared to the average persons 4-8 GB, it’s just not possible for me to shift my full music library to flash based players). The second is that I know I would be storing my work on Dropbox so that it was available from my Macbook Pro, my phone, the iPad, and any computer with an internet connection if I got really stuck and needed access to a file. So I really didn’t need a ton of storage space. Considering that my life is going to be mostly shuttling between home and a fully wifi-ed University campus, I also felt no compulsion to go for the 3g model. As I look forward, there may be a few instances here and there when I might wish I had the capacity to connect without a wifi signal, but I don’t see it being a major deal.
(Speaking of Dropbox, I’m going to write more about that in the future, but if you haven’t already gotten at least a free account, I highly recommend it. And if you use this link we’ll both get a bit of extra memory on that free account, so we both win.)
No, the iPad couldn’t substitute for having a computer and, depending on your work, it might not even substitute for a laptop. If I were working on sound design for a show, I’d absolutely want to have my MbP with me instead of the iPad. However, for work in grad school, as a student, teacher, and researcher, I am completely and utterly sold on the use-value of the iPad as a tool and not a toy.