Reeder for iPad is my favorite RSS reader on the iPad already though it came out only this morning. Not to hijack an acronym, but the main difference to other RSS readers is in the underlying model. Reeder for iPad is a document object model reader.
Let me explain that. RSS feeds and folders that contain them are synched over from Google Reader. They appear as sheets of paper and stacks of papers in Reeder:
You make the spreading gesture on one of these stacks to open one of the folders:
Only when you tap on a sheet representing a single feed, you get a more traditional pane UI. The design makes for good readability:
Buttons on the side of the screen make sequential reading easy. Controls at the top of the screen get the content out to email, Twitter, Instapaper and lots of other sites.