Personally, a $1K pricing point would confuse the market ($500-800 makes more sense), but otherwise the most basic assessment (as an earlier commenter noted) is that this is an iPod Touch on steroids, a bigger form factor, with surprises to be sure, but which plugs into a proven user experience (50M iPhone/iPod Touch owners can't be wrong), with an installed base of Apps and Media and developers. That is a GREAT starting point, no?
The target for this device? Oversized bags, such as purses, briefcases and backpacks, something that allows one to read a book, play a game or watch video while sitting on a bus, on the couch or in a cafe, something that I blogged about in:
It's in the Bag! The Apple Tablet Computing Device
http://bit.ly/3dmxRZ
Check it out if interested.
Mark