They're not competing with the iPad. They're competing with Sony PS and Xbox (sort of), except they're targeting a slightly different demo of the gamer market, and throwing in "hey it's a tablet too!"
Hard to stand out? I'd say this design stands out, as there's really nothing else quite like it. As to whether it will be successful, depends on the execution. All the old farts were poo-poohing the Wii before it came out too. That did okay.