My impressions (and I'm a Note owner):
1. It is excellent as an ereader. However, I still do use Kindle. Note is much better with picture-heavy books, PDFs, academic books etc. With other books Kindle is my reader of choice, for the paper-like, non-shining screen.
On Note I mainly use the Kindle for Android application and PDF readers.
2. The phone leaves nothing to be desired for me. The main advantage of Note is that it is a phone, tablet-like PDA, GPS, mp3 player, e-reader in one. I have been using standalone PDAs (Palm, WinMobile) for a long time and having both phone and PDA in one device is now a must for me.
3. I use the stylus almost every day and it is realy useful for drawing, sketching and note-taking. There are some replacement apps for the built-in S-Memo, like Freenote (from Android Market) which make an excellent use of the stylus. The built-in note taking app is OK, but somewhat limited. Supposedly the new version of S-Memo, coming with ICS, is much more advanced.
It also depends what kind of notes you take. If you mean reminder notes (or something of the kind), the S-Memo will be just OK. If you need structured notes, Catch or Evernote seems more sensible. If you mean longer notes (like lecture notes) you would have to use an external keyboard (bluetooth or USB through the OTG cable), since scribbling really long notes all day long would be rather uncomfortable - the hand movement is rather limited on a 5.3" screen (compared to a paper notebook).
4. Tablets are too heavy for constant use (IMO). The advantage of Note is that you can really carry it on you all the time, like a small notepad. Even if you carry a tablet, you also take a phone, which adds still a bit more to the weight - think of Note as several devices in one and you will see where the value is.
5. Note is upgradeable to ICS. Samsung has just released ICS for German users, with the others to follow soon. However, with GB 2.3.6 the Note is very useable and even if you don't upgrade, you don't miss much.
Rooting is also possible - it really depends what you expect. If you need to tweak the device to your taste, rooting gives you much more possibilities. However, not all ROMs are directly rootable and it is often necessary to first downgrade the Note to an older firmware, root it and only then upgrade to the newest firmware (which will keep the root).