The price isn't as much a factor as the usability of the product. No removable battery, so the device needs to be replaced or sent back to Apple with any battery issue.
If I'm outside and on the move I have my mobile device. The small screen stinks and the 3G is usually slow, but it serves well for quickly checking docs, google searches, etc.
In a hotel, job site, vacation, I'll usually have some sort of laptop with me.
At home I'll use the laptop or be at my desktop for the screen real estate, games, or long surf sessions.
There are very limited times where I see a tablet as being realistically useful, but there are plenty of people who feel Apple is cool, have plenty of disposable income, and $500-800 is nothing for them in order to be seen with the device.
I still wouldn't buy the first version of the device. The second version of the IPhone made several key improvements and it will be the same with this device.
Of course for many people who buy IPad 1 they will also just buy IPad 2 when it comes out and sell the old device on Ebay.