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Having used a 1st generation iPad, and now a Nexus 7, I prefer the smaller size for most things. For games which require some precision in pointing, the iPad is nicer. But the weight and the now-slow processor drove me from the iPad. The Nexus is fast, reliable, and has more pixels in a smaller screen space.
In most reading apps, you can choose font sizes, and a smaller font means more text on the screen. Ultimately, I chose a font size that is roughly the same in actual size as what I read with on the iPad, so I get a lot less text on each page, but the font is crisper thanks to the higher resolution.
I'm not sure how an Arc is $70 cheaper than a Nexus. The 16GB Nexus 7 is $199. The 32GB is $249. Seems the same price. But if you're looking for an open tablet, either the Nexus or the Arc would be a good choice.
I was uncertain about the 7" size until I looked at one in a store. I decided the weight savings was worth it - the Nexus is incredibly light, which makes it very comfortable to hold for long periods of time, even with the added weight of a case. The iPad required me to rest it on my leg to use it for any length of time.
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