I haven't had such good luck with this app on iPad. Loved it on iPhone (worked perfectly), unusable for me so far with my new toy.
Even when my AirPort Express is 8 feet from me and my Mac 3.5 feet from it, I still can't get it to buffer quickly, thus rendering the video streaming useless (who wants to wait around a longass time for the videos to buffer?). It SHOULD be quick and easy to watch the vids, considering how close I am to both the AirPort and Mac from where I watch, but it just refuses to load quickly enough. I might reset my AirPort and take a look at Little Snitch on my iMac, maybe those are causing the slowdowns.
Running old VHS-quality movies or 720p movies yield the same result: buffer buffer buffer for an eternity.
Until I can get it working right, I'll be sticking with the free version (I won't buy it yet) and remuxing mkv files painlessly to m4v. But yes, this app is awesome (when you get it working, not like me).
EDIT: After a little research, looks like I may have to tweet the bitrate settings in AirVideo...as the iPad is more bandwidth-heavy than iPhone for streaming, obviously.