First: yes, it's a lot smaller than an iPad and there is not option for 3G and there's way less memory and no option to pay more to get more memory. Also, you cannot watch HD video and while Bluefire is available in the Amazon app store it's not obvious how you could get it onto the device (doesn't appear in the app store on the device) -- at least for now, they've locked down the reader options to the kindle. I don't care, but you might. All that is the Bad.
Second: the screen is Big Enough. I don't like reading things on my iPhone. I do read things on my iPhone, but I don't like it. I don't mind at all reading things on the kFire. That's my definition of Big Enough. The kFire is dense, but fits comfortably in my hand. I could imagine, however, that a child or adult with smaller hands might have different feelings (I have large hands). The interface is dramatically different from the iPad, and that is going to form the major part of this description.
If you have an iPad, you can play your music (ripped from CDs or bought through iTunes), video (bought through iTunes) and use apps (bought through the App store), or read books through apps. Until the most recent major update, if you wanted to get music or video onto a device, you either had to connect it to a computer or buy it from the store via that device. The most recent major update no longer requires a wire-ful connection to a computer and I'm a little fuzzy on the details of how they've implemented the Cloud. I turned the Cloud off when it became clear that at least the first rev was causing interminable waits to even start syncing between multiple iPads and a single computer/account. If you are on the device, there is no way (that I know of) to find out what apps/music/video you have purchased and _could_ have on the device, but don't currently store there.
The kFire has dual displays: Cloud vs. Device. As long as you have connectivity, you can find anything that you have that _could_ be on the device (but isn't currently) and then decide whether or not to install it. The closest the iPad offered was going to the App store and looking at the Purchased tab. The kindle version is more or less an expansion of the "Archived Items" tab from the kindle ereader.
The _only_ hardware control is a power button. There's no manual mute/volume/one/n-button control on the device. This takes a little getting used to, but they did a nice job on it.
If you have set up your Amazon Cloud Player (I just did, and this is the main reason I decided to post a quickie review), you know that the Cloud Player will set up Adobe AIR and then dig around your harddrive looking for music. It does _not_ support Apple Lossless for fairly obvious reasons (there just isn't enough memory on the device to justify using that format) but will otherwise suck things out of iTunes. Once they are on your Cloud Player, you can access them on the device.
If you have bought video (TV or movies) through Amazon (I've bought some seasons of shows to catch up on programs I decided to start watching -- Castle, Rizzoli & Isles -- and some kids programming), it will be in your media library and thus available on the device through the Cloud.
If you have a Netflix account, there is a Netflix app available for the device.
This is unambiguously an excellent toy. As a network appliance, you never have to worry about losing data if something happens to the device (just get another device). As a relatively inexpensive piece of hardware (at $200), the pain and heartache associated with inadvertently losing or damaging the device is relatively less. Is it a good tool? Someone will find out whether it's good for Enterprise purposes; I'll post later whether the kids like it once I've introduced them to it.