There was certainly an element of surprise and shock. However, like a few other people have mentioned - most of us, myself included, just thought Vader was lying to Luke. It didn't seem right, so we figured it must have been a lie. That's the one thing I remember people debating afterwards.

Also worth mentioning - and someone brought this up just a few days ago - it was just about the worst kept secret in the world. I saw Empire about 2 or 3 days after it was released and me and my buddy had already heard about the big surprise. Seemed like everyone had. I remember waiting in this crazy-ass long line to see it. It was showing at a theatre that was in the corner of a large shopping center and our spot in the line was so far back that we were in the alley behind the center. Theatres were much larger back then and we still ended up waiting through a showing and having to wait for the next one. There were that many people out there. Everyone in line already knew, seemed like.

*edit* - I should point out that personally I hoped it was a lie until Return came out. It seemed wrong to me to make Vader something other than a really mean guy. It weakened the character to give him some tie to the good guys, some relation to them. It muddied the waters because you couldn't just outright cheer for the good guys, and want the bad guys to be defeated. You suddenly had to decide whether or not you wanted to have some concern for him. It was the first of many steps Lucas took in shrinking the Star Wars universe and weakening the story. I certainly liked the movie when it came out, but that twist dampened my enthusiasm considerably. Once it was official (In Return), there was only one movie I cared about.