My Kindle 2 is the best reading device I have ever used. However, to hook many more readers, Amazon blew it. If they had priced the kindle in the $100-$150 range, they would have gotten so many more people to buy them. Then, their ebooks sales (which is really what amazon is trying to sell; hence, the Kindle app for the iPad and ipods) would be a great deal higher.
As for comparing the iPad to the Kindle DX, outside reading is vastly superior on the DX. However, with some configuring, the iPad is a really good ereader (not counting outdoor use). Couple that with the myriad things that the ipad can do, and it's no contest.