You realize, of course, that there are loads more options for an e-reader than just the iPad or the Kindle. Depends entirely on what you need and want.
The iPad is a multifunction computer device, so it's way overpriced if all you want from it is a reader. The Kindle will tie you to Amazon for your books, as it won't read books in epub format.
There are also Sony readers, the Nook (Barnes & Noble), and a number of other lesser known brands. All have their specific advantages and disadvantages. For instance, I specifically wanted a reader without wireless capabilities. I certainly need no additional temptation to telecharge books on a whim, and I'm particularly interested in US books, which means I have to contend with geographical restrictions. I went with a Sony reader, and I just love the thing - and a big part of that is that there is no distraction while I'm reading.
The readers with 3G and/or wifi access allow you to do all sorts of fancy stuff, including websurfing and checking your e-mail. If that's what you want, then that's the sort of reader (or tablet computer) you should go for.