First, some general comments about the Air's performance. As many reviews have already stated, the smallest MacBook Air proves that you can squeeze relatively fast hardware into an extremely small package. My 2.3-pound Air with an Intel 1.6GHz Core 2 Duo chip and 4GB of memory is plenty fast for me. (And I shouldn't neglect to mention the Nvidia GeForce 320M graphics silicon, which helps to keep things snappy).
Third-generation MacBook Air: (I believe it's correct to call this the third generation.) Apple finally nailed it--though it did take three years. I've owned (and used extensively) both the original (January 2008) MacBook Air and the second generation (which debuted later in 2008) and, now, gen 3. The gen 1 MBA--as much as I adored it--was an experiment, in my opinion: it got so hot at times that I would have to turn it off. Gen 2 was better but still kept the fans humming most of the time. All of that went away with gen 3.
And the iPad 2: I don't think it's a figment of my imagination that the iPad 2 is faster than the original iPad (which I used for about a year then gave away). The dual-core Apple A5 processor and the revved-up graphics (and whatever Apple has done with iOS to tap into this improved hardware) makes a big difference.
Do you need both? One of the burning questions faced by the proud owner of both devices is, are they mostly complementary or mostly redundant? I still wrestle with this question. That said, there are two gigantic (and, yes, obvious) differences that make me lean toward complementary. One has a keyboard, one doesn't. And one runs OS X, the other iOS.
Needless to say, those differences make the iPad more convenient to use for some tasks and the Air better for others. Here's how I divvy up tasks on both devices. Note: I understand my usage patterns may differ--maybe dramatically--from those of others.
Home/home office: In my home office, the MBA is hooked up to a large display. No role for the iPad here. But as soon as I wander outside the confines of the office, I naturally reach for the iPad. The immediacy of the iPad can't be overstated. You pick it up and it's on. This, combined with its extreme portability (even when compared with the featherweight Air) and touch interface, makes it irresistible anywhere else in my home. It's not something I even think about really: The iPad is just the natural choice for light productivity, e-mail, Web browsing, multimedia, and anything else, beyond heavy-duty tasks, that I would do with a laptop.
Car: As I've written before, when I'm in the car, I don't even consider using the MBA. I have a 3G iPad, which, among other things, is a godsend when using Google maps. I've probably spent way too much time hunched over the iPad (to the consternation of those, like family, traveling with me) in my car mapping out everything under the sun from local Los Angeles establishments to Death Valley.
Airports: There's a lot more back and forth between the iPad and MacBook Air when traveling. I find I use the iPad more than the Air at airports. Again, it's the smartphone-like instant-on factor that lends itself to airport use. Though typically most people around me are using laptops, I can do most of what I need to do on the iPad.
That said, the virtual keyboard and the limitations of iOS can create major obstacles to productivity very quickly. That's when it's time to ditch the iPad. (And I won't delve into some of the annoying, seemingly artificial, limits to iOS and the iPad in this post. But here's just one example: Doing a simple cut-and-paste in some cases--in certain applications that I must use--is impossible on the iPad.)
Hotels: I'm inclined to immediately set up office when I enter a hotel room. And that means the Air is the tool of choice. Of course, it doesn't hurt that I can grab the Air and run down to the hotel eatery, carrying it with the ease of the iPad. Along these lines, the Air mimics the iPad in two important respects: it's light and turns on instantly.
Conferences: This is a toss up. If I'm at a conference (like my recent trip to Intel's headquarters for its annual investor meeting) where I have to convert speech/slides/photos/video into an article (I am a journalist, after all), it's MBA all the time. No role for the iPad here. I have to be extremely productive in a small window of time. In the confined space of the typical conference seat--and when I'm also using my portable recorder and camera--its light weight and small size bring home why the Air is such a great design. In some cases, I'm constantly switching between devices: putting the Air on the floor, then picking up something else. Any other laptop would be a burden.
But if I'm in a more passive role at a conference, where I'm sitting in on some highly technical meeting where I may or may not need to take notes, I prefer the iPad. Its virtual keyboard is fine for note taking and even penning short articles, if necessary.
In summary: The iPad trumps the Air in a surprising number of cases, which goes to show that a little extra convenience, i.e., a little less weight and a little more instant accessibility, can go a long way, because the Air is no slouch in either of those areas. But the iPad often slams into a productivity wall. When that happens, its coolness is irrelevant. The MacBook Air becomes, for me, the ultimate productivity tool.