I have both the MB Air and iPad and they don't overlap as much as you might think.
The iPad is much more portable even though I use it mainly around the house and office. While I could move the Air around as I do the iPad it is just a bit more cumbersome to do so--and sometimes just impractical (e.g., reading an ebook while going to sleep).
More than the touch screen is the fact that the Air is a true laptop and is a clamshell design. Sometimes this is a plus: such as not needing a case or other means to prop up the display. But whereas I have stood in line waiting to board a plane and fired off an email or two with my iPad I would be far less inclined to do so with the Air. It is not the weight it is the fact that it is a clamshell form factor which would make using it while standing up awkward indeed.
All that said I am blown away by the Air--more so than by the iPad. Moreover it really is a full fledged Mac inside that beautifully tiny package. It has plenty of design features that to me make it seem like more bang for the buck, even if it is more expensive. For the extra money you get far more memory, much faster CPU, full OS X and all that comes with it, I higher resolution display (albeit non touch sensitive), a full keyboard, etc. Ironically the iPad charges via the same old sync and charge cable used by iPods for years. The magsafe power adapter would be far better--and get more use from me--on a tablet as I often reach for the iPad while it is plugged in, forcibly yanking out the sync cable. While I like having magsafe on my laptop I would like it even more on the iPad.
Before Lion I felt a little cramped with the Air's display (I prefer the 11" Air for its size). Even though it has a decent number of pixels I often felt I was not using it all efficiently, compared to the iPad, as usually apps were "windowed" whereas the iPad always is full-screen. Of course I could, and did, mitigate that by auto hiding the dock and maximizing windows that benefitted from it (many do not). But Lion's full screen mode now takes that a step further.
As much as love the Air it is not quite able to be my "main PC." While it is indeed a full fledged Mac, it is not my only Mac. So in a sense that aspect is similar to the iPad to me: still need another PC/Mac. If I had to choose either iPad or Air it would be a tough call.
Michael