It depends on your needs. If you use Gmail, that's some big points toward the Xoom because of the excellent Gmail app (and the pitiful way that iOS handles Gmail). The aspect ratio of the screen makes it ideal for watching movies, too.
iPad 2 certainly has a lot going for it as well, and it likely the better choice for most people. In our house, I have a Xoom (and love it) and my wife will likely get an iPad 2 (and love it).
There's no quick "X is better" answer to this, and anyone that says so is misinformed. Do your research, try them both, and see which one helps YOU to get more done.
To be honest, although the Motorola has some better specs (better cameras, more ram, for example), you really can't beat the iPad. I believe that specs aren't everything, it's more the experience than anything else. The iPad has 65000 apps available, and that's not including all of the iPhone apps it can run as well. And don't let people tell you that the iPad is just a big iPod touch - cause it's really much more. Anyone who owns an iPad can tell you this. I have read reviews on the Xoom and apparently it's a bit laggy/sluggish, so I don't know.
However, if you depend on things like flash, and don't like Apple's closed "world" than you probably shouldn't get it.
However, I know that I'm getting an iPad 2 this Friday because I have waited a YEAR for this thing (since I never get first generation devices) and boy am I excited.