Nothing new here, but we're still rather surprised Apple didn't include the ability to use the iPad as a screen extender to begin with. Since one of the biggest criticisms of the iPad is that it's not a "true computer," having it act as a fully integrated sidekick to a real computer would be quite compelling.
So how's it work? If you've got a Mac (they used a 13-inch MacBook), you connect both to a common access point and the connection is made via WiFi. You also need to install a small helper application on your Mac.
The folks at Wired gave it a test run and it doesn't seem to bad. There seems to be a bit of lag due to the fact that it's connecting via WiFi, but nothing that makes it become unusable at any point. So something like IM boxes and e-mail clients would work best within the extra screen estate.
The Air Display App can be had for $10 over at the iTunes store.