My hair cut gal has a Ipad and I do have to say it looked awesome display wise and seemed to be doing well playing back some trailers and things.
I'd get something like it to use as a personal media player and on the go web browser info appliance but I wouldn't pay apples prices for one.
Just got my step dad a cheap MP4 player that can read text files, play AVI's and play MP3' audio and other files and it looked great for it's size and price, was only 50 bucks and you can get even better MP5 players that support even more goodies for about that price too, but they are a lot smaller.
Once they get that big though, yep, maybe a full on laptop or netbook would be better.
The new personal players have about a 4.5 inch wide screen max and fit nicely in a pocket and are plenty good enough to show off pictures, watch videos, or listen to music.
After seeing my step dads I'll probably get the best one I can for a good deal, unless the newer pad type things get way cheaper and easy to carry.