If you’re going to be using the device primarily for reading, I’d echo most folks here and suggest staying away from the iPad. E-Readers like the Nook, Kindle, and the Sony device (which I forget the name of but hear great things about) are best for reading because they use e-ink technology rather than a backlit computer screen. As a result you can read them anywhere you’d read a book, including on the beach in the glare of sunlight. The same can’t be said for backlit devices like the iPad, and reading them even out of the sun is harder on the eyes. Additionally, not having backlighting extends the battery life significantly. I have a Kindle and my wife has a Nook, and we go days or even weeks without charging (depending how much reading we’re doing).
On the other hand, if you want to be able to browse the web, view media, etc., and reading is only a minor reason for getting the device, the iPad may be your best option. Personally I’m a Droid person so I’m waiting for the wifi-only version of the Motorola XOOM (right on, Cindy Lou!), which is hopefully coming out around April.
In terms of PDF viewing, I believe the oversize Kindle version can handle PDFs. My first-gen model definitely cannot. The Nook seems to have better flexibility in general and should be able to access PDFs if you upload them from your desktop.
If I was more inventive I’d be out registering a patent for a device that has a backlit iPad-type screen on one side and an e-ink device on the other. Best of both worlds! If you decide to invent this, all I ask is 10% commission.