My verdict after an hour or so playing with one this morning.
1 - It's really nice to use. Slick, responsive, everything you expect from Apple. It's got that "wow" factor.
2 - Typing on it is horrible. Sorry Apple, I just don't like virtual keyboards. Not being able to rest my fingers on the keys is the worst bit, it hurts my wrists. The lack of an angle between keys and screen makes this worse.
3 - Web browsing is fantastic. Didn't do enough to find out if the flash thing is that big an issue though.
4 - The book reader thingy looks lovely, but I stand by my position that ebooks are the spawn of satan.
5 - Apple have utterly crippled it by refusing to add USB sockets.
Point 5 is the one that really grates with me. I wanted to like it, I really did. Apple had a chance to make something that could have been a genuinely fantastic bit of kit, with all sorts of posibilities for creative use. As it is, they've built a giant iPod Touch. If that's what you want, fine, you won't be dissapointed, but it's not for me.