Yes, ive done it. I converted a spare pay as you go sim to micro sim (for £10) and used it in the iPad - so yes, and ive done it, the iPhone 4 sim will work in the iPad. You might need to change the APN settings in your iPad - just google search APN iPad and your 3G service provider.
If your in the UK you can put a regularly paygo sim in the iPad and buy an internet booster from T-Mobile = unlimited 3G for 1 week £2.50 or 1 month £5 or 6 months £20.