The iPad can be many things, and with the DisplayPad app, it can pull duty as a small, second monitor. It works with only Macs, there is a bit of a lag, and the iPad's resolution isn't great, but the app costs only $2.99 and turns the iPad into a perfectly serviceable second display.
To get set up, you first must buy the DisplayPad app for $2.99. While it is installing on your iPad, grab your Mac and go to CleanCutCode.com. (Clean Cut Code, which appears to comprise two programmers in London, makes DisplayPad.) From the site's DisplayPad page, download and install the 1.7MB DisplayPad Mac app.
After you have both pieces of software installed, restart your Mac and open the DisplayPad app on your iPad and your Mac. And make sure both systems are connected to the same Wi-Fi network. The only evidence of DisplayPad running on your Mac is a small icon in the menu bar. Click on the icon and you should see your iPad listed. I say should because in my case--using a MacBook Pro running Snow Leopard and an iPad 2--it took me more than an hour to establish a connection. After numerous system restarts and resetting my modem, my iPad magically appeared in the DisplayPad window on my Mac. I'm not sure what did the trick, but I can report that since making initial contact, the app has worked without incident.
It's a convenient way to monitor apps as you go about your workday such as, say, your e-mail inbox, preferred Twitter client, and iTunes. You can easily drag apps back and forth between the right edge of your Mac and the left edge of your iPad, and you can control the apps being viewed on the iPad by using the iPad's touch screen or with your Mac's cursor and mouse/touchpad. There is a slight lag when navigating on the iPad. It is barely perceptible when moving the cursor, but it's enough that when watching video, the audio doesn't quite match up correctly.
The iPad's 1,024x768-pixel resolution is fairly low, and images appear pixelated. You wouldn't want to use the iPad via DisplayPad to view photos or videos, but the lag and resolution certainly don't keep it from potentially increasing your productivity by extending your workspace.
When you quit out of DisplayPad--by simply hitting the iPad's start button or clicking on your iPad listed in the DisplayPad window on your Mac--you'll witness a passing blue screen before your Mac desktop resumes, with the windows opened on your iPad having been moved back to your Mac.
Lastly, you can also choose to mirror your Mac desktop on your iPad using DisplayPad. To do so, have your iPad acting as a second display and choose System Preferences > Displays and on the Arrangement tab, check the box for Mirror Displays.