What is better for reading books on ipad, Nook or the kindle and why?

If you need color graphics, the iPad. If you just want to read eBooks, then it's a matter of choice between the Kindle & Nook. Thousands upon thousands of content out there, some exclusive. Battery life on the Kindle & Nook will outlast any iPad.

Might I ask, what is wrong with books? I love the feel of the physical book, turning the pages, etc

For versatility, I would suggest the iPad. It's not that good in bright sunlight however.

For purely ebook reading, the Kindle is king (I can't comment on the Nook as I've never used one, but I've been a Kindle owner & user since the day they were first shipped.) It's lighter, has free 3G (or wifi if you go with the new 3rd gen wifi one), insanely great (sorry, Steve Jobs) battery life, highly readable screen that you will forget isn't a printed page, and the best collection of books, magazines and newspapers via Amazon.com. It's been awesome to find myself engaged in a discussion about a book I've not read and be able to buy it on the spot and start reading it. I still buy physical books if it's something I want to display or hand down to my child or a friend, but otherwise, ebooks have become my staple for reading and I am reading more again.

The iPad costs more, does more, weighs more and isn't optimized for ebook reading although you can do it for short periods on it. I find that my iPad's screen flickers almost imperceptibly when I'm reading an ebook--it's just enough to get very annoying over time. No one else I know has reported this so I'm not certain it's not just my unit, but everything else I've said applies.