I have the most recent generation Kindle, and while I know I can read on the Ipad and while I do have the Kindle app installed on it, the amount of reading I do during the week for school and for pleasure makes it absolute murder to read too long on the Ipad. I just can't take the back-lit screen for much longer than a chapter or I'll get a headache.
The Kindle is so much more pleasant for me to read on. There are a few games on it, as well. It fits easily in my purse, which I can't really do with the Ipad. The Kindle is smaller...sized more like a real book for me, and is lighter.
I like them both, use them both, but for very different things.