The reading experience in the two apps is quite similar, but here there are some notable differences, too. In both interfaces, you can tap on the screen in order to toggle the display of various reading controls, including text settings, a link to the book's table of contents, and a slider that lets you jump anywhere in the book. The web app displays the black bar at the top of the iPad's screen at all times, showing you the time, your battery status, and wireless connectivity, while the native app only displays that information when you tap to reveal the various page controls. The web app displays most of its menu options via a toolbar that drops down over the top of the page, while the options on the iPad app fade in seamlessly over blank space.
The text options are more limited in the Cloud Reader app: you can choose from five text sizes, while the iPad app gives you six to choose from. (Both apps let you choose from black, white, and sepia color schemes.) Most of the books I read in the native Kindle app feature justified text, but some of the books in the Cloud Reader app appear to display with a ragged right margin. One book I tested, Paolo Bacigalupi's Ship Breaker, appeared justified in the native app and ragged-right in the web app, which I really can't explain. The native app can show book text in two separate columns when you rotate the iPad into landscape mode; the Cloud Reader will only show you a single, wider column.
In the native iPad app, you can tap or swipe to change pages. The same gestures work on the Cloud Reader web app. The only difference is in what happens as you make those gestures: the iPad app shows an animation of one page sliding away and another sliding in (and in fact, moves the pages right under your fingers if you choose to swipe from one page to the next). The web app offers no such animation--the new page just appears.
Amazon allows Kindle users (in both its iOS apps and on its dedicated Kindle devices) to highlight passages in books and make notes about the text. You can even opt to see passages that were highlighted by other readers. The Cloud Reader doesn't support this feature, though its toolbar features a button that lets you view any notes and marks you made elsewhere.
I noticed some lag and delays in the Cloud Reader app as I used it, especially when moving from chapter to chapter. It appears that the tool is doing some very clever things with caching and rendering portions of a book, perhaps one chapter at a time.
In general, the web app reading experience is pretty good. If I didn't have the native iPad app to compare it to, I'd declare it good. But it's not as responsive or smooth as the native app.