I just finished reading my first book on the iPad and I am happy to report eye strain is not an issue (at least for me). I didn't think it would be a problem considering how much time I spend staring at an LCD screens. I wonder how many people it will actually be a problem for.
Overall the iBook app works great. It feels really natural to use. The only complaint I have is that the app becomes less responsive the more bookmarks you make. I was using the bookmark feature to highlight small portions of the book. I would guess I had around 25 bookmarks total and the app slowed down noticeably. In fact, I reset my iPad thinking something was wrong with the whole unit.
How do like the iBook app? Eyestrain a problem for you?