No experience with Kindle, but I have a 1st gen iPad that I use for lots of ebook reading. In fact, I have it on a stand next to my computer and read and work on my workstation at the same time. I find novels or other reference books easy to read on the screen, but possibly because I haven't used anything else. Yes, reading outdoors is going to be off limits but I don't recall ever reading books on a sunny day in the park in the first place. If you even remotely thought you might want to do anything else on this device, then again... iPad. Movies, web surfing, magazines, apps, games, etc.. I mean, I have documents at home that I can load on my iPad and finish working on with a bluetooth keyboard, email, etc.. It does it all.
That being said, most pure Kindle users I come across seem to be very happy with the device.
Stepping back for a moment though, I think you have to look at the big picture. I don't think eInk ebook readers like the Kindle are the way of the future. The tech is just too limited, so either Amazon is going to make a niche product for primarily reading books and only books, or they are going to embrace technology that allows them to extend the functionality of the device and we all know Amazon is designing a tablet at the moment with LCD/IPS which leads me to believe they are planning more to challenge the tablet market currently occupied by iPad and the android contenders. I think eInk looks more natural, but I seriously think the advantages/disadvantages to reading off an LCD tablet vs eInk reader to be small. Reading books off the iPad with a glowing screen while lying in a dark bedroom was yes...very alien to me at first, but I quickly grew used to it and it seems very natural now.