I went through the same debate when I went shopping for a tablet about a year ago. All the Windows tablets were too big/heavy, and the iPad was the only other tablet on the market that could be taken seriously. At the time, the iPad (64GB + 3G) with a keyboard was the same price as the Air... quite tempting. Ultimately, I dumped the notebook entirely and have never felt a desire to go back. I'd say it is absolutely capable of being a replacement for a full-blown notebook, so long as you don't need Adobe Illustrator and InDesign (the only areas I've found the App Store lacking).
A keyboard is of course mandatory for this transition. I only use it about 30% of the time, but for that 30% I couldn't perform the task without one. I thought about going with one of the case/keyboard combos, but it contradicts one of the iPad's greatest strengths—take only what you need. This is great when I'm on the road and want to run into a coffee shop to check email and post some already-written content: just grab the iPad (in it's slip-case) out of the bag and go. Dealing with a clunky/cumbersome keyboard case combo when I don't need a keyboard... at that point I might as well have a regular notebook.
I've been using the Logitech Tablet Keyboard since I picked up the iPad. It's light, durable, and has long battery life—three very important factors to travel. I use the iPad regularly for web design and development, writing, sketching, browsing, navigation, the occasional network troubleshooting, and even a little photo edit when I'm away from my workstation (thanks to PhotoForge and the Camera Connection Kit); the keyboard has never let me down. With the included stand/shell, when it's time to buckle down and get some typing done it is just as easy to use as a notebook (both on a table, and on the lap).
