Echoing John, James Bow, and others.
Ignoring the utter stupidity in some of the design features. (my favourite comment: No Flash [support] .... will leave huge, gaping holes in websites. I hope you don't care about streaming video! God knows not many casual internet users do. Oh wait, nevermind, they all do!), I look at this and see it as a product looking for a market to fill. It is so limited in what it can do (the breadth of the apps from the Apple store notwithstanding), how and where you can use it, that it really doesn't fill a need that people have. It's too big to be truly portable (like modern cell phones), and too small to be useful (like a laptop).
Yes it has on on-screen keyboard, but to be efficient, you need to be able to type with both hands. On your lap would be awkward, as the screen is not angled making the viewing angle painful, and apparently you can't put it on a hard surface as the back is not flat, causing the device to rock as you touch it. So two handed typing is out. Can you say: design flaw?
So who could use it? Commuters relying on public transit really. The extra screen real estate would be nice for the commuter on the go that has an hour ride somewhere. But that's a pretty specific market, and there's a large group of transit riders that do not have $500 to just throw around.
From a practical perspective, I can't see using it around the house. I'd be too scared of dropping it or it being knocked off an end table. Seriously, its just large enough that if I had to put it down for a second, an edge would be protruding out into the living space.
With two boys running around, that's a disaster waiting to happen! I need to know, how damn rugged is it?
So from my perspective, its a $500 device with limited utility that is just waiting to be broken.
And yeah, Apple is still evil.