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I have a laptop but would never ever read books on it. (It's a 13" Macbook.) Because of the keyboard I can't hold it in a manner such that I can have it close enough to my eyes to get the size font I want. Also, there aren't any good eReader apps that has an interface that's truly optimized for reading on a laptop screen - hint, I don't want to read black text on white ever on LED. Only grey text on black, and with the brightness turned way down. In general though, laptops just too ungainly to read on. It might work for others with a tiny netbook, but I'm not a fan of the protruding keyboard either way.
I've never regretted not having flash on the iPhone as there are tons of retarded games in the app store if I want them and I don't watch much flash video other than youtube, if at all. The lack of backgrounding really doesn't bother me. The tasks I would be using this device for don't lean well towards multi-tasking meanwhile, and to the extent it might be useful the push notifications are perfectly sufficient for IM, twitter, etc.
My iPhone is perfect for reading everything but technical books. If I bought either the iRex or iPad (or both), that is the hole those devices are meant to fit in for me.
I'm not worried about the battery problem. I never exchange batteries on my iPhone or ruin the battery, and have owned an iPod, iPod Touch, MacBook, and iPhone and so don't worry about battery performance degradation with Apple devices nearly as much as I did with the multiple Dell laptops I owned before.
As far as the space, for books it is irrelevant. For everything else, I will likely only sync my favorite items. So I'm not too worried about it.
Really, both devices fit the same market, with the iRex edging for screen technology and the iPad edging for operating system capabilities. I'll probably have to just use both and see what I end up utilizing more over a month or so.
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