I like the look and feel of the iBook, but the Kindle app works fine too (and, currently, provides access to more books). It will be interesting to see what Barnes & Noble offers iPad users when their app comes out. What I do not understand is why Apple didn't offer free 3G connectivity for the iBook like amazon does for the Kindle.
We had a Kindle DX for about two weeks before we sent back to Jeff Bezos. It sucked. The iPad and iBooks win by a landslide over e-ink and files with no TOC or page numbers. The Apple combo is soooooo much more elegant and smooth.
For me, I like the Kindle app. I can read books on my iPhone, MBP, iMac, and Kindle. Other pluses are a larger selection of books and usually better prices.