Disclaimer: I'm the lead developer and co-founder at Bad Elf, LLC.
Just got back from AOPA Summit and spent some time in the ForeFlight booth. It's great to see the excitement around the iPad in aviation. It's not perfect, but no platform is, and for the money I don't think it can be beat.
A few comments based on remarks earlier in the thread...
* Yes, only "Made for iPod" (MFi) certified devices can be linked to the iPad without jailbraking... right now the Bad Elf GPS and GNS (Bluetooth) devices are the only iPad-compatible devices on the market.
* There are pros and cons to the "dongle" versus Bluetooth form-factors, so it really depends on the pilot preference. Both support WAAS, 2.5-10m accuracy, good locks inside the cockpit, etc.
* The internal GPS on the iPad 3G has some serious limitations - once you're out of range of 3G cell towers, it can take minutes to reacquire a GPS lock, if it ever does. I heard this over and over again from pilots last week. Every corporate jet pilot I've met recently has told me the internal GPS on the iPad 3G does not work reliably enough at speed/altitude.
* I was able to get a solid GPS lock (iPad WiFi + Bad Elf GPS) on my Southwest flight from LAS to PHX last weekend - 565mph, 29K feet. Very cool, and something I've never seen with the internal GPS receiver on the iPad or iPhone.
* I saw the FlightGuide GPS-over-WiFi device at AOPA Summit. Neat idea, but it has a serious limitation -- it's not Apple authorized, so it will only work with their app.... going with a MFi-certified external GPS means it works with any and all apps, so you're not locked into a single app vendor, and can use it for non-aviation activities.
Happy to answer any other questions about GPS on the iPad, I've been living/breathing/flying this stuff for the last 12 months of my life

And maybe if it goes well enough I'll finally be able to afford that RV-10 kit I've been drooling over for the last few years!
-Brett