Windows XP + Stylus != iPad
Not even close.
This is yet another example of assuming that Windows is good enough for any purpose and the hardware is all that matters. Clearly it doesn't, or one of those products 'like the iPad' would have been a runaway success 10 years ago.
The single most important part of a computer from a usability standpoint is the human-computer interface. In the consumer market, usability is king. Good enough is fine for functionality (i.e. can it play music, movies, look at pictures and browse the web without looking at a manual or even thinking about the interface? Great, then it doesn't need 2 cameras, 3 USB ports and a terminal shell app built in). Apple is the only company that gets this, though Microsoft seems to slowly be learning. I haven't touched a WP7 yet, but it at least looks promising in the videos.