My most effective use of the iPad for teaching has been for receiving, grading, and returning student assignments. Since receiving the iPad, I have gone from everything in hard copy to everything (except exams) submitted, graded, and returned in digital form.
I grade short, recurring written assignments (e.g., their weekly post to a blog, their weekly entries in a group process log) through comments in Moodle, typed in a comment box. This helps me remember the purpose of these comments--they are short holistic feedback with a couple of suggestions for improvement. Typing them in Moodle preserves them for me and for students to access at any point in the semester.
I grade longer essays that will not be revised as PDF files in GoodReader. I can circle problems or write brief comments in the margins with a stylus and I can use typed pop-up notes for more extensive comments. GoodReader makes it easy to email the document to students when I have finished grading.
I grade drafts that will be revised in Word using comments and track changes. Students have been more responsive to my comments in subsequent drafts, because it is so easy for them to access my comments and immediately make the changes in the same document. I probably could do this in the CloudOn version of Word, but I more often do it in the familiar version of Word on my laptop.
One reason I stayed with hard copy assignments for so long was because I could carry a stack of assignments in my bag and grade whenever I had a spare moment. The iPad makes that even easier because it is more portable than a stack of papers. Plus, my grading can be saved to the Cloud. GoodReader will download documents so that I don't have to have wifi to access documents (CloudOn does require wifi).
Students get feedback from me more quickly and I don't have to rely on them to remember to bring their paper with my comments to office hours--my comments are always available to both of us.
I have found it essential to use a stylus and a bluetooth keyboard. Writing with my finger was barely legible--it looked like a first grader wrote comments. The stylus isn't great, but students can read the comments. My Logitech keyboard lacks some sensitivity compared to a regular sized keyboard, but it is a great improvement over the screen keyboard, which resulted in so many errors (my own and the truly bizarre autocorrects the iPad sometimes makes).
Many of my anticipated uses of the Ipad in the classroom either didn't materialize or weren't so much more efficient or spectacular to motivate me to retool. I agree with what others have said previously--there is a learning curve that requires time and energy and we are fortunate to have great access to technology in the classroom already.
However, I use the iPad all the time for research. When I travel, I am able to leave the heavy laptop at home and rely on the iPad. I find it frustrating that files live in apps instead of folders that I can access in more than one app (though Dropbox helps with this), so I could never give up my laptop entirely, but for short trips, the iPad works well. All of the articles for a current project are now in Dropbox and indexed in Refworks. I'm using Twitter to stay up to date on public debate related to my research and I track blogs. I could do these things with other devices, but I didn't. The iPad makes it easy.