I've used it pretty extensively now as someone I know bought one for iPhone/iPad game testing. I spent most of the weekend with it.
The main use for is to browse internet/media while lounging on the couch, which is actually a very pleasant experience.
However, that's about it. It's not a great device on a table, you can't really use it while walking (you kind of can but it's very clumsy that way), it can't fit in your pocket so you need a bag of some sort or to actually carry it, you can't do any real typing on this thing, defenders have created very narrow definitions to make it seem useful (hey, it's a 'content consuming device'! another way of saying, it's only about halfway as useful as it should be). Power users should forget about it altogether as a replacement.
If you are comfortable reading on LCD/LED type screens for long periods of time, then it also serves as a very nice e-reader.
I consider it very much a luxury item. 500 bucks for something to use in limited situations. And I question the need to have to be 'connected' at every point in your life. When a device exists soley to give you media/internet access at every point BETWEEN your smartphone and computer/laptop, you really have to start to wonder: Are you spending too much time staring at a screen?
This would be a mind-blowing device at 250 bucks. at 500? ehhhhh.