This is an interesting thread, I personally don't see the new Air as ipad competition, the MacBook air is still a laptop, where as the ipad is not... I love the ipad... I use it all the time... But I would also love the new MacBook air, I think the MacBook air and the ipad together could give everyone all they would ever need as portable devices, the MacBook does many things the the iPad will not do.... And the ipad does many things a MacBook won't do, but i agree with other posts, a combination of the two would be very interesting.
Yes OS X Lion is in a way suppose to be be a combination of the two but a Mac is never going to have touchscreen functionality (as jobs has said) like the iPad and the iPad is never going to have full computer functionality (because that's not what it's meant to be)