This sounds awesome.
But what does it do to battery life? We're now streaming three different videos at once:
1.) An incoming video to the iPad.
2.) An outgoing video from the iPad.
3.) The videos to the Apple TV.
Does this work on the iPhone too, or is it iPad only?
This will work with iPhone too. What it is to me is the ideal solution to the "phone call video on the big screen" dilemma. If the camera is on the HDTV, it's likely 10 feet or more away. Bad sound, distant video. But controlling and shooting the video at the iDevice level is perfect. And then you flip that video to the big screen.
As for battery life, I don't think it's as extraordinary as all that, unless you want to talk about three hours or so -- a five- or ten-minute call might take a half hour off the battery... Say you were at 90%, you'd probably finish well over 80. It's kind of counter-intuitive, but I've watched an entire movie on Airplay, and though it cost the battery, it wasn't a battery-draining monster.
It's 720p, in theory.