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For me personally, I don't see them as competing products as such.
I've both a 7 inch (Galaxy Tab) and a 10 inch (Asus Infinity) tablet and I think they both perform different roles.
The 7 inch is ideal for a portable device that can be carried around very easily as it will slip into virtually any back and - in some cases - even is large pockets. It goes everywhere with me.
The 10 inch is the "stay home" tablet as it really is too big for easy portability as will require a good size bag to carry it in. Also, it's not that convenient for use while travelling, getting it out while on the bus is awkward especially if you are standing up. I use it constantly while home and almost never use the 7 inch one while home.
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