I have no use for it myself. I'm already running Android on my HD2, which has a 4.3" screen. Getting a tablet for my use seems redundant to me.
Instead, I got the Kindle Fire for my three-year-old. I'm tired of sharing my phone with him. He's always asking for it to play Angry Birds or Fruit Ninja. Now before you think I'm a bad parent, I surround those two games with educational apps that teaches him abc's, 1-2-3s, colors, and shapes. He still prefers the games, but he's curious about the other apps too. It works decently well. He gets tired of Angry Birds and Fruit Ninja after a while and starts to play with the other games. That was my original purpose for buying the Fire.
For the cost of a smartphone without a two-year contract, I thought the Kindle Fire was a great deal. My son is already familiar with Android. The 7” form factor is probably better suited for a toddler than a 10” device. It also comes with the Netflix app, which has lots of kid-family shows.