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I've written 1000-word articles with no problem on the iPad's keyboard in landscape mode on my lap. I like iAWriter, which has a very readable font and some extra keys that are very useful. I have a keyboard, too, for more serious work.
That said, there isn't a single word processing app for the iPad that comes close to desktop functionality. Pages has a fair number of the necessities but its styles are lousy and can't be changed unless you have a Mac and run Pages on that. I don't. (I use Linux and OpenOffice for serious work.) Anything you write on the tablet will almost certainly have to be downloaded and formatted on a bigger machine. And on top of that it's a bit of a pain to get stuff on and off. Thank the gods for Dropbox and DropDAV.
Still, the iPad is a great and addictive device. I love Zite and Flipboard, which bring me all kinds of pieces I doubt I would have found any other way. I can do legal research on it free thanks to Fastcase and use Goodreader for pdfs and Stanza for epbs. I'm considering selling my Dell mini, because although it has much better word processing capabilities its screen is too small (and can't be run in portrait mode!) and the keyboard is no great shakes either.
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