As the thickness and weight of the iPad decrease, it will become less cumbersome and more natural. iPad2 is already a big step forward in the latter two categories: it is significantly less awkward to hold an iPad1 but still has quite a while to go.
Typing today on an iPad is slightly awkward. Good voice recognition could eliminate this in private settings.
When these physical dimensions diminish, input improves, and screen resolutions increase, the experience will converge towards that of a truly interactive notepad or piece of paper, thereby becoming much more natural.