The iPad doesn't have a built-in camera, but you can give it something better. By putting an app onto each an iPad and an iPhone, you can connect the two via bluetooth and have a wireless camera for your iPad.
All you need to do is download the Camera A and Camera B apps onto your iPad and iPhone respectively—note that Camera A will set you back a buck while Camera B is free. Once you've got the apps on your devices, make sure bluetooth is switched on, and open the apps. Ta da! You'll see everything your iPhone's lens sees on your iPad.
To take a picture you'll tap the camera icon at the bottom of your iPad's screen. A pop up prompt will ask you if you really want to save the photo and that's it, you're done. Oh, and if you want photos to save to both your iPhone and your iPad each time, then you can flip the little toggle switch in the lower right of the screen:
How does this witchcraft work? Based on the fact that I just saw my iPhone lock screen twice moments ago, I'd say that the apps are allowing your iPad to mirror your iPhone's display. I guess that means that you could also use this app setup to truly turn your iPad into a gigantic iPhone. [Camera A and Camera B]
Update: Keep in mind that this app will only work with an iPhone 3Gs and not other models.