After I updated to the latest iOS my iPad has new password settings. You can turn off simple password and use full letters and numbers passwords. I am not sure if this is new or not from the preview iOS 4 versions, but I just wanted to share.
Worded passwords are new to iOS 4.0. So iphone 4's etc have this feature since the day 4.0 came out. But yeah its new to ipad now that we have 4.2.1 for it i was happy to have worded password too