This is a subject that I have spent days of my life working on. You can only make video work on the iPad using HTML 5 video players. But unfortunately, the HTML 5 video players that we can use have SEVERE drawbacks. They just aren't ready for prime time. HTML 5, as a technology, isn't even finalized yet.
I chose the current flash based video player we are using because the company behind it is already testing HTML 5 compatibility. Once that goes live, all our videos should start working on the iPad and any other browsers that allow HTML 5 without any additional work.