I use my ipad 2 a lot as a couch companion to look up stuff and post on forums while I'm watching TV. I do a lot of reading on it in the kindle app. I watch netflix on it while washing dishes or sitting outside waiting to flip burgers on the grill. I use remote potato to stream blu ray rips from my pc to wherever I am and to schedule windows media center recordings or football games or whatever there is that I don't want to miss. I did a large part of my christmas shopping idly sifting through amazon's window shop app while watching football over the last couple weekends. I loved having it by my side while playing borderlands so I could look up the stats of various pieces of new loot I found to judge how good my finds were. I tethered it to my phone so my little brother could surf the internet during a recent long drive. I've spent hundreds of hours gaming on it by now. I don't know about other tablets, but there are some truly first quality games coming out for the ipad these days.
People say that tablets are purely consumption devices, but I don't see why you couldn't pair one with a bluetooth keyboard and use one of the better word processing apps to fulfill 100% of your document creation needs. I'm certain there are other apps that have at least some use in other creation areas as well, but that's not really why I bought mine anyway. I consume a lot of media, and in that specific arena no netbook can match my ipad 2 in speed, portability, or usability. It has literally become something I find myself reaching for every few minutes for whatever reason. I don't think I can be without a tablet of some kind from now on.
Edit: On a side note, I can see how a cheap tablet would be nothing but frustration. If you're serious about getting a tablet, don't settle for some kind of cheap knockoff like that $100 tablet Ars reviewed a few months ago. To a certain extent, you really do seem to get what you pay for in this area.