The first app to pull this admittedly excellent trick was called iDisplay, but it was slow and buggy. Thankfully, Air Display takes the pain and frustration—and most importantly, the lag—out of using the iPad as a spare monitor.
A second monitor for your Mac, when you're on your Grownup Computer: That's a perfect use for the 1024x768 iPad, and exactly what $5 app iDisplay lets you do. But it needs some work.
Mac users wanting an extra monitor can turn their iPhones and iPads into external multitouch displays. All you do is download the iDisplay app, an extension for OS X, and let the data flow over either 3G or Wi-Fi. Tada!