Yes, Apple does provide iPad simulator from its SDK, but if you are an iPad developer, you know it has its own limitations. How would you test GPS, or Accelerometer functionalities for instance? If you are an iPad Developer, you know you can not really test your application on the real iPad device now. At least, not until Apple releases it for the masses in a few weeks.
Interestingly, a company named Vimov has apparently built an iPhone App called iSimulate. It sends video from the simulators that come with Apple SDK to iPhone. The app sends back the information from iPhone like GPS coordinates, accelerometer and multi touch info to the SDK simulator so that you can actually test these functionalities for your iPad App. They claim you can save 80% of the compilation time if you run and compile your application on the iPhone Simulator.
Agreed, there are limitations than testing the app on the real iPad, but hey, what other options do we have now?