I'd go for the iPad2 - it's like a micro computer. You have all the functionality of an eReader, along with internet, applications and lots more.
I thought about an eReader - Nook, Kindle, etc. When I talked with our local librarians and they said that ebooks aren't cheap. And if you want to get them from the library, the iPad allows you to get/download all the software for each kind of ereader. So now I can put all forms of the book on hold, wait until for which one comes up first, then cancel the other holds.
Plus our kids can use the iPad for games or schoolwork. The teachers have them earn credits for doing online games and learning programs. So now they don't have to use MY computer.
Finally, it's super portable. So when my mom was in the hospital, I was easily able to pack it up, take it with, text with my husband, read an ebook, surf the internet, etc. all without dragging along my whole laptop. And the batterylife is AMAZING!