I've been having pretty the same thoughts regarding the tablet. There's no way it's called the iSlate, that is the crappest name ever. macbook touch isn't a bad touch, it fits in with the iphone/ipod touch distinction.
so what will it be for? movies, books, magazines, music, apps, etc. sounds pretty cool, although the problem you pointed out about always having to hold it up is really big.
a lot of people are talking about it as replacing netbooks, which doesn't strike me as correct. netbooks are primarily for work. you can type up word docs, work on your spreadsheets, etc etc. these are things that wouldn't be very practical to do on a tablet, i think.
there's also a question about content delivery. of course the tablet will have built-in wifi, but without some sort of 3g/cell data thing that means that it is effectively a large ipod. the advantage of many netbooks is they have 3g built in.
I don't really get who a tablet would be aimed at...I've got a laptop and an iPhone, and there's no way that I'd buy another device. it doesn't strike me as logical that apple would expect people to buy another $800 device. so that means it's aimed at people who either don't have a laptop or don't have an iphone. is that a realistic market to go after?
i imagine the final product will be fairly different from all the speculation, effectively rendering all of this analysis completely worthless!