Apple is recommending developers switch to the Universal app format that supports both iPhone/iPod and iPad devices. A key advantage of a Universal app is that you have a single app to manage in the App Store. This also avoids any confusion for the user as they download the same app regardless of which device they are using.
An added advantage for the user is that if they own both an iPad and an iPhone or iPod they can use the app on all the devices and it should look good on all of them.
However there is a disadvantage for the developer in that in order to support all devices from a single binary a lot of conditional code is required. For a well structured app that follows the MVC model this may not be too bad but I suspect that as the iPad version of the app grows new features it will get more difficult to maintain.
An alternate model that seems to have quickly taken hold in the App Store is the “High Def” app. This is an iPad only version of the app which makes full use of the large screen space and new UI elements of the iPad - though I think the HD tag is a bit of a stretch. One noticeable trend with HD apps is that they are more expensive than the equivalent iPhone app. For example, the original Plants vs. Zombies game sells for $2.99 whereas the new iPad HD versions sells for $9.99. That is a big leap for what is essentially the same game.
It remains to be seen if this large price differential for iPad only versions can be maintained once the initial glow from the iPad launch wears off.
It is probably still too early to say how popular Universal apps will be with developers compared with the iPad HD approach. A lot will depend on user reaction and in the end developers will follow the approach with the best sales.
My guess, for what it is worth, is that it will make sense to convert most existing iPhone apps to a Universal binary even if you plan to also produce an iPad HD version. I suspect iPad users will not tolerate iPhone apps that rely on the pixel doubling technique and there is no reason to cut yourself off from this additional market.
Certainly if you are starting a new app it makes sense to target the Universal format unless you have a strong reason not to. There would not currently seem to be much point developing a Universal app that requires a camera but who knows what the next iteration of the iPad or iPhone OS 4.0 might bring?