I've got Plex installed on my MacBook Pro. I'm using the iPad Plex app to stream mkv's from my library on my MacBook to my iPad connected via HDMI to my plasma TV.
1080p files are super jerky, and unwatchable.
720p files however, play perfect.
So I've set up a 1080p folder, and a 720p folder (for my iPad)
Essentially I'm using my iPad as an Apple TV.
I think the post above is correct. I don't think the iPad has the horsepower to handle 1080p