Interaction is through the "Multi-Touch" screen, same as with an iPhone. It was designed to fill the gap in their product line between an iPhone and a MacBook. That is, it's meant to be more computer-like and capable than an iPhone, with a bigger screen, but simpler and more compact than a laptop.
There has been a lot of discussion about the iPad announcement. Some of it quite negative. The Free Software Foundation says it is "a huge step backwards in the history of computing". And there are the inevitable enumerations like 8 Things That Suck About the iPad or 16 Reason the iPad Sucks. Other bloggers call the iPad's future frightening and dystopian.
Why all the fuss? There are multiple reasons, but much of the anger stems from the "closed" nature of the device. Apple chose not to create a computer-like tablet: a stripped down MacBook without a keyboard. Instead they created a scaled-up iPhone and they are adopting the "locked down" model which they've successfully wielded over the iPhone.
What does "locked down" mean? Physically the iPad doesn't have standard computer connectors like USB or DVI or HDMI. You cannot connect the iPad to the hundreds of millions of USB devices out there, or hook it up to your monitor or TV. Perhaps Apple will make special connectors available, but this is entirely at their discretion, they are in control.
Similarly the software model is "closed." Anyone writing software for the iPad will need pay Apple for the developer's kit and then get their software approved by Apple. Apple can choose to deny any software it doesn't want on the device. And if they approve your software then you have the privilege of forking over 30% of your revenue: they get a piece of every sale.
This is entirely unlike how the computer business works. Both Macs and PCs today are "open" in the sense that developers are free to write and distribute software without getting any approval and without any revenue sharing. For example Microsoft has no direct control over Windows developers.
So where does this "locked down" model come from and why is Apple pushing it? Apple's first successful product was the Apple II computer released in 1977. By 1984 they had sold 2 million Apple II's and had released the Macintosh, the common ancestor of all current Apple computers. Over the years Apple created desktops, laptops, the all-in-one iMac, even servers.
In 2001 Apple came out with their first major non-computer product, the iPod. The same year they opened their first retail store. In 2007 they announced another non-computer product, the iPhone, and shortened their name from "Apple Computer, Inc." to just "Apple Inc.". Both the iPod and iPhone were run-away hits, racking up huge sales while becoming cultural icons. Today Apple has 294 retail locations worldwide and has sold a total of 240M iPods and 40M iPhones. During Apple's most recent quarter alone they sold 21M iPods, 8.7M iPhones and 3.4M computers.
So for the last 10 years Apple has been selling more and more "devices" rather than traditional computers. The iPod was basically a fixed function device, like a digital camera or a GPS. But the iPhone and iPad are more computer-like, they can run 3rd party applications. There are over 100,000 "apps" available in Apple's "App Store". Apple has essentially evolved a new product category, something in between a traditional consumer electronic device and a computer.
So is this a good thing? I believe that innovation is a good thing. For better or worse they are choosing to innovate not just in software and hardware but in business models. All else being equal I personally would rather have a device that was open. I enjoy the freedom and flexibility of normal computers and I think the model has been successful.
However, I also believe Apple has the right to establish any terms for their product so long as they are legal. Apple is beholden to their shareholders, if they believe a closed model will lead to greater revenue, they should pursue that. Apple is choosing this route not capriciously but because they feel the extra control will provide the best possible user experience. The traditional computer experience is often quite painful.
This "locked down" arrangement is normal in the world of video game consoles. Sony, Microsoft and Nintendo all maintain very tight control over their platforms, they approve every release and receive revenue from every game sale. These closed platforms are very successful, they generate billions of dollars in game sales and millions of people enjoy them. This is not to say computers should follow suit, but it demonstrates highly commercial closed systems can deliver satisfying experiences for wide audiences.
Apple spends over a billion dollars a year on R&D. They are taking a huge risk with the tablet, the form factor is unproven and even possibly even jinxed by past failures. The company expects a return on their investment and their risk taking. Again if I could get the iPad hardware without the restrictive platform, I would take it. But that's not an option at this point. The platform is closed, but we are free to choose for ourselves whether to buy one or wait for something different. This is how it works. The marketplace will sort it out in the end. Open, closed or something in between.
Good ideas will flow to all platforms eventually. If the iPad is successful, we'll see open alternatives, the tablet business is unlikely to evolve exactly like the console business. I appreciate and value open platforms, but they cannot be mandated. Competition is even more crucial than openness.