Oh, wow, what an ordeal at the Apple store. I showed up @ 7pm with my swapped iPad for a refund. I figured I'll just try again in a month rather than play the whole multiple replacement game. I didn't have an appointment, thinking it would be a simple refund/store credit.
The Apple rep (don't think she belonged to the Genius Bar) told me that since the unit is already a replacement all they could do was another replacement, but first they would have to set up an appointment with a Genius and the next available time frame was 8:30pm.
She then stated since the issue was already dealt with they couldn't do another replacement, but since that wasn't explained to me they could do another replacement. I explained to her that I didn't want to get into the whole replacement cycle and that I would just like a store credit. She said she could not do that. I told her I've had the iPad less than a week, the original bought on Saturday and the replacement was made on Sunday. She explained to me that they would do what they can to get me an iPad without the issue. I said "Are we just going to keep opening up iPads until we find one without any problems?" She just looked at me and realized that wasn't really an option.
She then took my original receipt and my email printout about the replacement and went back to the Genius Bar. She again said we can do another replacement and they'd do what they can to test it in the store. I again asked "What happens if the replacement still has issues? Would I get a refund or would I have to live with a defective unit?" She said, "We'll cross that bridge when we come to it, but we can only do one replacement for the issue." I replied "And then what? I'm still well within my 14 day return period. Am I stuck with a defective unit?" I then explained to her that I already explained my concerns to the salesman last Saturday and what my plan was: Test the original, if bad, bring it back for a replacement. If that was also bad, I would then come in for a refund and try again later. The salesman (I had his card so I was able to tell her who I talked to) understood my concerns and said that within the first 14 days I could bring it back for a full refund, no questions asked.
She then left and went to talk to someone else, I'm assuming a supervisor. She came back and said "I think we can do a refund, or we can do a replacement, but we'll have to schedule an appoint with a Genius." (still about an hour away at this point). I told her I'd rather just take a refund and said I was fine with store credit as it would prove I had every intention of coming back.
Now I know several users have stated here that they are hearing policies where they get 1 replacement for the iPad
and then a refund, but that's not the way this rep made it sound.
When I go again next month, I'm going to have the salesrep write down the fact that I could still get a refund even after a replacement within the 14 days on the back of his/her business card, just so there's no question what my options are.

Or I guess I could find out from Apple what the company policy is or if it's up to the store on how they deal with it.