I have an iPad1 and use it a lot when I travel. It's a great device and mostly has lived up to the hype. My only bitch about it is the fact that on the standard keyboard layout, there are no arrow keys or forward delete key for navigating inside a document. I find that this really slow me down. There are word processing apps available that do have them and I use one, but they only work with that app, not as a system wide keyboard. So, if I need to type something a bit long, I fire up that app and then copy paste it into the email or forum message I am writing.
Other than that, the ipad is great. The Numbers app is really good, google maps is amazing, there are really cool art and music apps, games, etc. I have a app that reproduces the flight arrival/departures schedules at thousands of airports in real time. It is so much more portable than a laptop. On a flight you can just stuff it into the seatback pocket. It's not as good a reader as a Kindle, but it's not bad.
I don't know about the Xoom. I hope it's good and gives Apple some competition. I think they are more expensive.