To say that the iPad 2's cameras aren't meant to take photos is an understatement. They produce horrible images.
The application itself is a copy-and-paste treatment of the iPhone's camera. It's as basic as it comes. The camera is launched via a software button on the iPad's screen and it jumps to life quickly. There are really only a few options.
Images are captured by pressing the software button at the bottom of the screen. If you want to switch to the user-facing camera or video recorder, there are buttons that let you do that. The application also supports zooming and provides instant access to the photo gallery. Otherwise, there are no fancy features to the camera software itself.
How are the results? Bad, bad, and bad. The user-facing camera captures a pathetic 0.3 megapixels (VGA). Images are chock full of grain and digital artifacts, and I noticed the camera had trouble handling white balance correctly. It's pretty much worthless for anything other than FaceTime chatting (more on that in a bit).
The main camera is better, but not by much. It handles essentials such as white balance, color representation, and focus well, but there's still so much grain/noise that still images are mostly unusable. Indoors, in darker rooms, the camera produces rough images with little detail. When outdoors in plenty of sunlight, results are much improved. Beyond the quality problems, as I've written in the past, using a tablet as a camera is beyond awkward. It's just not meant to happen.
Same goes for video. The camcorder application, which behaves the same way the camera app does, produces only slightly better results. Apple says the main camera captures 720p HD video, and my tests showed that to be true. The main camera is much more useful for video -- the user-facing camera really is meant for FaceTime only.
Is it nice that the cameras are there? Sure. But they are bottom-of-the-barrel when it comes to quality.
Why did Apple add cameras to the iPad? FaceTime, of course! FaceTime is Apple's video chatting software. As with the iPhone, it works only via Wi-Fi (this is a silly limitation, but whatever). Making FaceTime calls requires that you dial in an e-mail address (not a phone number). I was able to conduct FaceTime chats with other iPad users, iPhone 4 users, and users of the FaceTime application for Apple's desktop and laptop computers.
The experience isn't much different from most video chatting software. The iPad 2 produces a large image of the person with whom you're speaking and shows what you look like in a smaller window. The extra screen real estate is nice, and I found the overall experience more pleasant than FaceTime on the iPhone 4.
What are the downsides? The Wi-Fi limitation, for starters, and, more important, the inability to use it with anything other than another iPad, iPhone 4, or Apple computer. It would be nice if Apple opened up FaceTime so that it works across video chatting services. That'll never happen, but one can always dream.