The high demand for Android smartphones and tablets must've given LG a boost of confidence because they believe they can make a tablet that will not only be better than iPad, but will also be the most productive tablet to be released.
We all know productivity isn't iPad's strongest benefit, but media consumption is. However, the iPad has left a gap that needs to be filled by other tablets. It's obvious people want tablets to replace their laptops. Even enterprises want them, except the iPads are not much use to them. If someone can create a tablet that is good for media consumption, but also for productivity, then it should receive even higher demand than iPad. But this is all about the OS, and the OS is Android, which means either Android 3.0 has some powerful productivity tools and features (though unlikely that LG's Optimus tablet would use it), or LG is going to add them themselves.
In fact, if LG creates some tools that they would keep for themselves and offer them only to their customers, this could be a much better approach to differentiating themselves from other manufacturers. I believe the skinning of Android's UI is a weak differentiation, and annoys a lot of customers too because of the slow updates. The custom skins actually hurt Android's popularity by not allowing it to have its own identity, the way Windows has on PC's and laptops. Everyone knows Windows, but not everyone knows what Android is, at least not in the mainstream market. There's a higher probability they know what Droid is, instead.
LG's Optimus tablet is going to be released by the end of the year, so we'll all see then what they are talking about, exactly.