Morning Witch, I'll see what I can do to answer your questions!
First off, I've had no difficulty using the iPad with our wireless network, other than the streaming issue previously mentioned. If it's any help, were running Websense through a Linux server with synetrix as our ISP.
On the subject of documents and saving them. You can save documents onto the iPad, it has it's own local storage, so that is not a problem. However, it's akin to saving onto the c: drive of a pc, and that PC can only have one user. The iPad is a very personal device in many ways. You can't have different user accounts, which in an educational environment isn't particularly useful. Dropbox is just one way of getting around this problem.
Dropbox is essentially just an online folder that can be accessed by the iPad, Mac or PC. Any device can add files to the dropbox, and any device can read or edit the files already there. So in a school scenario, you could have just the one dropbox account linked to every iPad in the class, and the teachers pc. Students could save their work to the dropbox folder (very easy) and the work would then appear on the teachers pc to be printed, stored or shown on a projector. I would also suggest that each iPad had it's own gmail account, as almost every app I've seen so far has the option to email work to another machine.
I mentioned locking down, by this I mean that the iPad has restrictions that can be imposed, locked behind a 4 digit pin. These include preventing safari, YouTube, and iTunes to be run, as well as preventing apps from being installed. You can also put in ratings for movies, tv shows and music so that only child friendly media can be played. These can all be found in the general settings menu, and wouldn't take more than a few minutes to setup for each iPad.
Finally we move onto the topic of whether the iPad could be a replacement for PCs. Honestly, I don't know. I've haven't been witness to a primary school class for a long time. It really depends what the aim of the class is, and whether the teacher in charge is enthusiastic and flexible in their approach. But you could easily do the following:
1, Internet research tasks.
2, write and send email.
3, using iWorks, create power points and word documents.
4, Create digital pictures easily and without any mess! These could then be uploaded to a VLE, sent straight home or printed for display.
5, Use one of the many apps available to get a greater understanding of a topic. I've mentioned planets before, but there is also Maths Chalkboard, which is apparently a great tool for learning the basics of maths.
I think it would have to be a very planned lesson, but with a flexible approach (like most lessons I imagine). It would have to have a focus, and the teacher would need to know exactly what apps to use to get the desired effect. From a technical standpoint, I'm unsure whether they would be something you could setup and forget about, or whether they would need constant hand holding.
Anyway, this is turning into an essay! My final point would be to buy cases for your ipads! A good case will protect it, and provide a vital angle for typing with. So the total cost for 10 iPads would be somewhere in the region of £5500. I would ensure that teachers want to teach with an iPad before committing. But could they replace an ICT suite? That's up to individual schools, but I could see it happen.