This feature is only for when iOS 5 comes out. Apple TV and iPad 2 can be used in conjunction to surf the internet, mirror your screen and more wire-free. For now, it’s iOS 5 Beta 6 for the iPad 2, and iOS 5 Beta 5 for Apple TV.
If your Apple TV has the latest iOS, iOS 5 that is, then you can use the Apple TV together as an extension of your iPad 2, and only for the iPad 2. While the iPad 1 can also be used as an extension of your iPad 1, it is still more limited to what the iPad 2 can do for Apple TV.
If you have the iPad 1, you can extend your Videos to Apple TV wirelessly, by going to Videos, and play a video and click on the icon that looks like a Video with an Up arrow on the Bottom Right of your screen. You can also do a presentation wirelessly with Keynote to your Apple TV from your iPad 1. Amongst other 3rd Party App that supports AirPlay.
iPad 2 has the ability to mirror your home screen with either the HDMI Cable or the VGA Cable, however, with Apple TV, you can leave the HDMI Cable or VGA Cable in your drawer and use your Apple TV to display anything you like, including surfing the internet with your Safari Browser wirelessly. No cables needed and hassle free. All you need is your iPad 2 to be on the same wireless connected via Wi-Fi as your Apple TV. Your iPad 2 and Apple TV also need to be on iOS 5.
Enable Mirroring to Apple TV, HDMI Cable or VGA Cable on the iPad 2
Apple TV could also be an extension of your games by mirroring what you play to Apple TV, making Apple TV to emulate a game console. To enable Mirror Out feature on iOS 5, open the Multitask bar by double clicking your Home Button or if you have Multi-gesture enabled, do a four finger slide up while in the Home Screen and slide to the right where you will see the Controls for Music and next to the Next Track button, you will see a TV Box with an up Arrow. Click on that, select your Apple TV and slide the Mirror to ON.
To enable Mirror for your iPad 2 using HDMI or VGA Cable, just plug in your Cable and turn on your TV and it will Mirror automatically. Mirror is to mirror everything on your screen, including game playing. I would recommend highly of Real Racing 2 HD where the game is made for Dual Screen Racing. Map of the Track, Laps Time, Elapse Time, Lap Counter, and your Position will be displayed on your iPad 2 screen, while the race itself will be displayed on your TV.
If you have a Jailbroken iPad 1, you can use DisplayOut from Cydia to mirror your Home Screen. However, don’t expect DisplayOut to Wirelessly Mirror your Home Screen. Mirror your Home Screen Wirelessly is exclusive to iOS 5 on the iPad 2 to Apple TV.