There's another thread floating around here with input from people that own both.
My wife has the ipad. It's to large for me, personally. 7" or so is just right for me.
Honestly, the ipad feels kind of archaic after a while on Android and a rooted NC. No notification bar, no widgets, just rows and rows of icons. And the lack of ports is terrible.
I'm not a fan of the itunes-for-everything paradigm - I really don't like itunes. I like that I can plug my Nook color into any computer in the house, the wife's computers, someone else's, or work... and just drop music, video or book files on it.
I think the best up-and-coming tablet is the unnamed Toshiba that should be coming soon.
Tegra 2 / Honeycomb
Full sized USB
Full sized SDXC
Full sized HDMI
Perfect!! (Well, still too big in my book. But all of the ports make up for that a bit). All it needs is a good IPS screen...or something else with good viewing angles...
But a tablet isn't worth $500 to me. It's got about $200-$300 in value in my book. The Nook color fit the bill perfectly.