For extended viewing, I'd recommend a case that you can prop. Holding the iPad overhead while laying down is tiring after about 30 minutes max. Sitting down with the ipad on your lap isn't bad, however.
Edit: to answer the OP's question. The videos are nice and crisp. I was a little worried too that they may seem stretched or grainy and they are not. Only thing on the iPad vs the iPhone 5 is the perception that its not "full screen" as it is a 4:3 ratio, not 16:9