I bought my kindle 2 prior to the ipad, and i admit when i just had my kindle i used it ALL the time, it was a great companion on my honeymoon - the wife was too!
I bought my iPad and took that everywhere and my kindle started gathering dust - especially when i figured out how to convert my ebooks stored on my macbook to ibook readable format - thanks Stanza!
After the honeymoon period of owning the ipad finished i realised that the pad was HEAVY especially when holding a sandwich in one hand and trying to read on the kindle with the other, i also realised i was carrying an expensive bit of kit and i wasn't using it for anything morew than reading whilst at work - just wifi only plus i've got an iPhone so i game on that.
The decision to restart using my kindle was a good one, after weeks of no use i fell back in love with it, the lightness, the fantastic screen and it just does what i want it for to read books when commuting or having lunch, when i'm home kindle stays in work bag and i pick up the iPad who'll entertain me all evening with web, games, music and video.
My Wife was skeptical about the kindle being any good but after reading a few books on it when i wasnt using it she wanted one for herself, so for her birthday i bought her the kindle 3 wifi, i'm so jealous the screen looks even better than my kindle 2 and it's lighter and smaller but with the same screen size!
So all in all if you have an iPad and you really want a kindle purely to read on go for it, if you don't read much, try the kindle app for a few months, make sure they have the types of books you like to read then if your happy take the plunge or if you don't mind the weight and the backlit glossy screen stay with the iPad, they are both great devices!