Just transfered over my 1st movie to the iPad from a Digital Copy. Crank 2: High Voltage Picture doesn't look that bad but when things get moving it gets a little pixelated. I guess renting HD movies for the iPad is the way to go.
I haven't watched any w/digital copies that come bundled with a DVD on my iPad yet (Netflix) But I did watch a portion of Batman/Superman Public enemies streamed from my pc with no issues. I'll be watching Dragon, Tiger, Gate (http://www.youtube.com/watch?v=bYP2vwcK6h0) on my iPad at some point and that movie has penty of fast action sequences. Hopefully there won't be too much pixelation while watching the digital conversation.
What bitrate is it encoded at? I expect they'd be quite limited by space, so you might try manually ripping the disk and re-encoding at a higher bitrate if the pixellation bothers you. As a rough guide, your final H.264-encoded rip should be somewhere between 1 to 2GB in size. The 700MB rips that are all over pirate sites are absolute garbage, done by people who seem to care more about releasing as many files as they can in as short a time as possible than whether it's actually possible to appreciate the film after they've butchered it. If the "digital" version included on DVDs these days is anything like that, I'd strongly suggest ripping manually - it'll take more time, but it's worth it.