Yup, you can even run the iPad 3 as a HiDPI monitor. Really cool. As per the back to your iMac, no dice. Get an Apple TV and use AirPlay Mirroring. Mountain Lion may even make the iPad Display redundant if it can mirror a second display over AirPlay.
Note that air display is quite expensive for what it does (IMO), and it accomplishes this over wifi, so expect some lag unless you turn off retina or have your ipad display mainly static images.