So much is dependent on the app. It's hard to discuss the iPad without tacitly including the entire associated software ecosystem (without really being conscious of the scope of that oversight).
I agree with your main point, and I have no doubt that as the medium continues to expand, the quality of the software and interaction will also grow.
Just curious, what visual design apps are you using / would you recommend?
Paper from FiftyThree[1] is very good. Omnigraffle is a useful tool to, but pricey. Photoshop for ipad looks promising too. Matt Gemmell recently wrote a blog post about using the iPad from a UX designers point of view[2].
I agree with your main point, and I have no doubt that as the medium continues to expand, the quality of the software and interaction will also grow.
Just curious, what visual design apps are you using / would you recommend?