The processor spec is a hard one, especially considering that with a tablet it has to be taken with battery life. How little power it sips is an important processor spec these days.
So, how do they stack up? The iPad has much better graphics (three times as powerful), but most of that extra power goes into feeding that ultra high-resolution screen. So in the end that is pretty much a wash.
CPU is where they heavily differentiate. The Tegra 3 has an interesting system, 4 high-clock cores and one low-clock cores. Most of the base functions can be accomplished by the low-clock core at the cost of very little battery life, which is great if your software can stay in that mode most of the time. But it can very quickly it can scale up all cores, which at about 1.4 GHz will suck your battery dry fast. The A5X just has two slower cores. It will not beat the pure CPU performance of the Tegra, in fact the Tegra is about twice as fast, but battery life will be more consistent on the iPad. So, if you want an ARM tablet that can run the most demanding apps, to hell with battery life, you want a Tegra 3.
When you consider that the MacBook Air has a similar spec sheet (Intel i5 processor, onboard Intel graphics, an 11" screen, etc.) and retails for $999, you are getting a comparable (if not superior, based on its compatibility with all of the MS/business software) machine at the same price point and in tablet form!
I don't think it can replace ultrabooks that well. Most people I see using them are on the go. It's on the lap while typing, or on one arm. The Surface can't do that. It must be on a large, hard surface for the attached keyboard idea to work, and that limits its usefulness.
Why would I buy a MacBook Air when I could get a tablet that I can use as a workstation when needed?
That's where the Air really runs out ahead. Workstation to me (and to most) doesn't mean 10" screen. It means docking, using an external monitor and mouse (and maybe keyboard). The Air can run an external 2560x1600 display through the Thunderbolt connector. It can even run an external desktop-class graphics card. I doubt the Surface will be capable of more than 1080p externally.
Right now the ultimate in portable workstations is the new Macbook Pro. It can run two 2560x1600 Thunderbolt displays, a third running 1920x1200 through HDMI passthrough on the last Thunderbolt display, and its own screen all at the same time. Independent tests say you can run video on all screens simultaneously with no lag. And it does all that while being very thin.
The MacBook Air that I priced (from Apple's own website) had an Intel i5 and a Intel 4000 integrated graphics chip. The processor specs are pretty much the same for the Surface Pro, and the GPU is rumored to be the 4000 or its successor (granted we won't know for sure until full specs are released). Meaning, to everyone except fanbois, the two will perform about the same. If the Air can push a 2560 X 1600 external monitor... then the Surface Pro will (it's the same hardware). If the Surface comes around $1000 then it will offer the same basic performance as a lower-end Air for the same price... but in a different form factor. That form factor might be a serious selling point for businesses.
No offense, but I don't care what you think of when you hear "workstation"... especially when you start comparing the Surface Pro to MacBook Pros that will probably cost between $200 and $1200 dollars more. I know several businessmen whose office provides them with both laptop computers to use as workstations (with a single 20-22 inch LCD monitor... they aren't in software development) and tablets to use on the factory floor (or elsewhere). I'll bet those businesses would jump at the opportunity to give them one piece of hardware that will do both adequately!
Businesses aren't interested in "flashy". They want solid (often middling) performance, at a bargain if possible. A tablet that seamlessly integrates with their existing systems and potentially replaces separate units might be attractive (we'll see)...