It entirely depends on the book.

My second-generation Kindle sees a lot of use for novels. My iPad+Kindle.app get a lot of use for software books, textbooks, and other things with a lot of fixed-flow content and tables that benefit from the much larger screen.

When I didn't own a kindle I used to buy and read a lot of kindle books on my iPod touch. Even now that I own a kindle I share it with the wife, and we might both be on a bus/airplane without internet wanting to read.

I really hope this is not the way forward.

I own a K2 and K3, in addition to my iPad. If I'm reading linear text outdoors in bright sunlight, or at the beach, I prefer the kindles. For all other situations (Office, Home, Bed, textbooks, random-text (references) - I use my iPad. I've got about 15 textbooks (though I ended up having to buy Radia Perlman's Interconnections from O'Reilly's "Safari Books Online" one PDF chapter at a time and read it through goodreader) and about thirty linear-text books. I'd say the ratio is about 70/30 right now in favor of the iPad.

I don't own a Kindle, but I still occasionally buy books in the Kindle store to read them on my iPad. I like the iPad for technical books and occasionally fiction. But reading on the iPad is slightly more straining than reading from paper, so for leasure reading I prefer paper.