They aren't even competing products....
I agree. Overlapping, not competing.
They compete only to the degree a netbook competes with a Touch or a MacBook. You can surf (etc.) on all 3, but they are different experiences and appropriate for different times. The iPad (can I call it an iSlate, please?) was designed to one-up the netbook, which is all most people need in a computer most of the time.
It will be great for sticking into your carry-on luggage for a trip, and will be a much more satisfying view of a movie than a Touch, yet 1/4th the weight of a MacBook and half the weight of an Air (and 1/3 the price if it gets stolen from your hotel room.) The Touch is fine for checking email, but pretty miserable if you have to answer much of it, while the iPad will be a reasonable, if not desirable, typing experience.
In my house, 75% of the computer use is using the internet while watching TV or drifting off to sleep. This will be a great device for that, where the awkward shape, extra weight, heat, and keyboard just aren't very necessary. On the other hand, most of us have to hold a Touch 6-12 inches from our face and perhaps take our glasses off just to read the text, making it impossible to watch TV at the same time.
The size of the Touch is fantastic for portability, but is just barely usable by people with eyes that are more than 40 years old. A notebook computer is fine, but really more than most people need most of the time.